Paper Information

Journal:   SANAAT-E-BIMEH   FALL 2014 , Volume 29 , Number 3 (115); Page(s) 27 To 50.
 
Paper: 

THE EFFECT OF BANK OWNERSHIP ON THE INSURANCE COMPANIES' FINANCIAL PERFORMANCES

 
 
Author(s):  MAHMOUDI VAHID, KHAMSEH SARA*
 
* UNIVERSITY OF TEHRAN
 
Abstract: 

The relationship between the firm's ownership structure and its performance is considered as the most important issue in the field of finance. An increase in the performance indices causes shareholders' satisfaction and is considered as an opportunity to raise risk acceptance capacities of the companies. The effect of the ownership types of major shareholders (bank and non-bank ownership) on the performance of insurance companies in Iran has been investigated in the current research. To measure the performance, two criteria including, return on assets (ROA) and return on equity (ROE) were applied as the dependent variables. The required data have been acquired from the financial statements of 16 firms in insurance industry during 2004 till 2011.
The results revealed that there is a positive significant linear relationship between major bank ownership and the performance of insurance companies in consistent with the monitoring hypothesis. Moreover, the insurance companies can benefit from their technical capabilities in the realms of the technology and finance. They take the advantage of a powerful financial institution's support conditions. On the other hand, there is no significant relationship between the major non-bank ownership and the performance indices.

 
Keyword(s): BANK OWNERSHIP, FINANCIAL PERFORMANCE, FINANCIAL LEVERAGE, SIZE OF COMPANY, AGE OF COMPANY
 
References: 
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