The Impact of Corporate Governance on the Profitability of Insurance Firms in Syria

Souzan M. Kabbani and Essam K. Zaneldin

International Journal of Financial Research, 2021, vol. 12, issue 2, 150-163

Abstract: This paper investigates the impact of corporate governance on the profitability of joint-stock insurance firms listed and unlisted in the ¡®Damascus Securities Exchange¡¯ in Syria during the period from 2013 to 2019. Research data was collected from the financial reports of the insurance firms and the reports of the ¡®Syrian Insurance Supervisory Commission¡¯ and the ¡®Syrian Commission of Financial Markets and Securities¡¯. A model was then proposed for corporate governance of insurance firms. The proposed model considers eight independent variables (board size, independence of board members, non-executive board members, solvency, ownership, firm size, firm age, and joint-stock) and two dependent variables (return on equity and return on shares). Multi regression analysis for the ¡®Balanced Panel Data¡¯ is used to analyze the relationship between the governance of insurance firms and their profitability. The analysis of the results revealed that some independent variables (such as firm size, ownership, and none-executive members) have a significant positive impact on the return on equity while the ¡®firm size¡¯ and ¡®ownership¡¯ independent variables have a significant positive impact on the return on shares. The ¡®solvency¡¯ variable has a significant negative impact on the return on equity and return on shares. On the other hand, the ¡®firm age¡¯ variable has a significant negative impact on the return on equity while the ¡®joint-stock¡¯ variable is considered statistically significant with a positive impact on the return on shares. It was also observed that the ¡®independence of board members¡¯ variable has no impact on the dependent variables.

Keywords: Syria; corporate governance; agency theory; Syrian insurance companies; return on shares; return on equity (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:jfr:ijfr11:v:12:y:2021:i:2:p:150-163

DOI: 10.5430/ijfr.v12n2p150

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