Uncovering financial distress conditions and its determinant factors on insurance companies in Ethiopia

Author:

Ayinaddis Samuel GodadawORCID,Tegegne Habtamu Getachew

Abstract

The study examines the financial distress situation and its determinants in insurance sectors in Ethiopia. To achieve study objectives, revised Altman‘s 2000 is adopted to measure the financial distress situation. The study adopted an explanatory research design with an arrangement of secondary data analysis via document analysis, quantitative approach, and deductive method of inquiry. The study used panel data from ten insurance companies over the study period 2010/11-2020/21. Descriptive and regression analyses were performed to analyze the data using STATA 14. Econometric model estimation procedures and multiple regression assumptions were tested accordingly. The random effect regression result revealed that firm-specific factors (liquidity and profitability) have a significant positive association, whereas firm size significantly negatively impacts financial distress. While the random effect regression result also proposed inflation has a positive and significant association with financial distress. However, firm-specific factors (revenue growth and leverage) have positive and negative, respectively, and macroeconomic factors (Gross Domestic Product) have positive but statically insignificant to the financial distress situation of insurance sectors in Ethiopia.

Publisher

Public Library of Science (PLoS)

Subject

Multidisciplinary

Reference79 articles.

1. Competition under financial distress;I. Hendel;The Journal of Industrial Economics,1996

2. How costly is financial (not economic) distress? Evidence from highly leveraged transactions that became distressed;G. Andrade;The journal of finance,1998

3. Financial distress, reorganization, and organizational efficiency;K. H. Wruck;Journal of financial economics,1990

同舟云学术

1.学者识别学者识别

2.学术分析学术分析

3.人才评估人才评估

"同舟云学术"是以全球学者为主线,采集、加工和组织学术论文而形成的新型学术文献查询和分析系统,可以对全球学者进行文献检索和人才价值评估。用户可以通过关注某些学科领域的顶尖人物而持续追踪该领域的学科进展和研究前沿。经过近期的数据扩容,当前同舟云学术共收录了国内外主流学术期刊6万余种,收集的期刊论文及会议论文总量共计约1.5亿篇,并以每天添加12000余篇中外论文的速度递增。我们也可以为用户提供个性化、定制化的学者数据。欢迎来电咨询!咨询电话:010-8811{复制后删除}0370

www.globalauthorid.com

TOP

Copyright © 2019-2024 北京同舟云网络信息技术有限公司
京公网安备11010802033243号  京ICP备18003416号-3