Financial distress and its determinants: Evidence from insurance companies in Ethiopia

This research is aimed to investigate the determinants of financial distress of insurance companies in Ethiopia using balanced panel data from eleven insurance companies for the period covering from 2008 to 2019. A quantitative approach and explanatory design were employed to realize the stated obje...

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Autor principal:	Yonas Nigussie Isayas
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2021
Materias:	altman’s z-score determinant factors ethiopia financial distress insurance companies Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/ed5126e8558546b6b9a4f045058865db
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spelling	oai:doaj.org-article:ed5126e8558546b6b9a4f045058865db2021-12-02T17:55:33ZFinancial distress and its determinants: Evidence from insurance companies in Ethiopia2331-197510.1080/23311975.2021.1951110https://doaj.org/article/ed5126e8558546b6b9a4f045058865db2021-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2021.1951110https://doaj.org/toc/2331-1975This research is aimed to investigate the determinants of financial distress of insurance companies in Ethiopia using balanced panel data from eleven insurance companies for the period covering from 2008 to 2019. A quantitative approach and explanatory design were employed to realize the stated objectives. To achieve the study objectives, secondary data were collected from annual financial statements of sampled insurance companies for the stated period and analyzed using descriptive statistics and a random effect (RE) regression model. The descriptive statistics output of the study revealed that sampled insurance companies are in the safe zone. The RE regression model results show that profitability, firm size, leverage, and company age were negatively correlated to financial distress having a strong negative effect on financial distress. On the other hand, asset tangibility and loss ratio have a positive and statistically significant effect on insurance companies’ financial distress. Based on the analysis of findings, the study suggests that Insurance Companies in Ethiopia shall be more concerned about the internal environment (factors) while developing policies and strategies to manage the financial distress condition.Yonas Nigussie IsayasTaylor & Francis Grouparticlealtman’s z-scoredeterminant factorsethiopiafinancial distressinsurance companiesBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 8, Iss 1 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	altman’s z-score determinant factors ethiopia financial distress insurance companies Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	altman’s z-score determinant factors ethiopia financial distress insurance companies Business HF5001-6182 Management. Industrial management HD28-70 Yonas Nigussie Isayas Financial distress and its determinants: Evidence from insurance companies in Ethiopia
description	This research is aimed to investigate the determinants of financial distress of insurance companies in Ethiopia using balanced panel data from eleven insurance companies for the period covering from 2008 to 2019. A quantitative approach and explanatory design were employed to realize the stated objectives. To achieve the study objectives, secondary data were collected from annual financial statements of sampled insurance companies for the stated period and analyzed using descriptive statistics and a random effect (RE) regression model. The descriptive statistics output of the study revealed that sampled insurance companies are in the safe zone. The RE regression model results show that profitability, firm size, leverage, and company age were negatively correlated to financial distress having a strong negative effect on financial distress. On the other hand, asset tangibility and loss ratio have a positive and statistically significant effect on insurance companies’ financial distress. Based on the analysis of findings, the study suggests that Insurance Companies in Ethiopia shall be more concerned about the internal environment (factors) while developing policies and strategies to manage the financial distress condition.
format	article
author	Yonas Nigussie Isayas
author_facet	Yonas Nigussie Isayas
author_sort	Yonas Nigussie Isayas
title	Financial distress and its determinants: Evidence from insurance companies in Ethiopia
title_short	Financial distress and its determinants: Evidence from insurance companies in Ethiopia
title_full	Financial distress and its determinants: Evidence from insurance companies in Ethiopia
title_fullStr	Financial distress and its determinants: Evidence from insurance companies in Ethiopia
title_full_unstemmed	Financial distress and its determinants: Evidence from insurance companies in Ethiopia
title_sort	financial distress and its determinants: evidence from insurance companies in ethiopia
publisher	Taylor & Francis Group
publishDate	2021
url	https://doaj.org/article/ed5126e8558546b6b9a4f045058865db
work_keys_str_mv	AT yonasnigussieisayas financialdistressanditsdeterminantsevidencefrominsurancecompaniesinethiopia
_version_	1718379143484145664

Financial distress and its determinants: Evidence from insurance companies in Ethiopia

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