Determinants of financial distress: evidence from insurance companies in Ethiopia.
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| Authors: | Kebede, Tekalign Negash1 (AUTHOR) tekanega@gmail.com, Tesfaye, Getahun Deribe2 (AUTHOR), Erana, Obsa Teferi1 (AUTHOR) |
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| Source: | Journal of Innovation & Entrepreneurship. 2/28/2024, Vol. 13 Issue 1, p1-23. 23p. |
| Subject Terms: | *Insurance companies, *Business insurance, *Diversification in industry, *Bankruptcy, *Price inflation, Psychological distress |
| Geographic Terms: | Ethiopia |
| Abstract: | The issue of financial distress has received much attention of scholars because it harms firm financial and operational systems which could lead to insolvency. The objective of this study is to examine the determinants of financial distress in Ethiopian insurance companies. A panel dataset was obtained from 11 insurance companies which range from 2010 to 2021. The study used the "Altman's Z"-score model as a measure for financial distress. The pooled OLS regression results revealed that profitability (ROA), liquidity levels, insurers' size, earnings growth, diversification have negative and significant effect on financial distress. Moreover, inflation rate, claims ratio, leverage, and asset tangibility have positive significant impact on financial distress. The study will have implications for different stakeholders, such as managers, policy makers, shareholders, etc., in that firm-specific and macro-economic factors are essential for managing the status of financial distress. [ABSTRACT FROM AUTHOR] |
| Database: | Entrepreneurial Studies Source |
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| Header | DbId: ent DbLabel: Entrepreneurial Studies Source An: 175755992 AccessLevel: 6 PubType: Academic Journal PubTypeId: academicJournal PreciseRelevancyScore: 0 |
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| Items | – Name: Author Label: Authors Group: Au Data: <searchLink fieldCode="AR" term="%22Kebede%2C+Tekalign+Negash%22">Kebede, Tekalign Negash</searchLink><relatesTo>1</relatesTo> (AUTHOR)<i> tekanega@gmail.com</i><br /><searchLink fieldCode="AR" term="%22Tesfaye%2C+Getahun+Deribe%22">Tesfaye, Getahun Deribe</searchLink><relatesTo>2</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Erana%2C+Obsa+Teferi%22">Erana, Obsa Teferi</searchLink><relatesTo>1</relatesTo> (AUTHOR) – Name: TitleSource Label: Source Group: Src Data: <searchLink fieldCode="JN" term="%22Journal+of+Innovation+%26+Entrepreneurship%22">Journal of Innovation & Entrepreneurship</searchLink>. 2/28/2024, Vol. 13 Issue 1, p1-23. 23p. – Name: Subject Label: Subject Terms Group: Su Data: *<searchLink fieldCode="DE" term="%22Insurance+companies%22">Insurance companies</searchLink><br />*<searchLink fieldCode="DE" term="%22Business+insurance%22">Business insurance</searchLink><br />*<searchLink fieldCode="DE" term="%22Diversification+in+industry%22">Diversification in industry</searchLink><br />*<searchLink fieldCode="DE" term="%22Bankruptcy%22">Bankruptcy</searchLink><br />*<searchLink fieldCode="DE" term="%22Price+inflation%22">Price inflation</searchLink><br /><searchLink fieldCode="DE" term="%22Psychological+distress%22">Psychological distress</searchLink> – Name: SubjectGeographic Label: Geographic Terms Group: Su Data: <searchLink fieldCode="DE" term="%22Ethiopia%22">Ethiopia</searchLink> – Name: Abstract Label: Abstract Group: Ab Data: The issue of financial distress has received much attention of scholars because it harms firm financial and operational systems which could lead to insolvency. The objective of this study is to examine the determinants of financial distress in Ethiopian insurance companies. A panel dataset was obtained from 11 insurance companies which range from 2010 to 2021. The study used the "Altman's Z"-score model as a measure for financial distress. The pooled OLS regression results revealed that profitability (ROA), liquidity levels, insurers' size, earnings growth, diversification have negative and significant effect on financial distress. Moreover, inflation rate, claims ratio, leverage, and asset tangibility have positive significant impact on financial distress. The study will have implications for different stakeholders, such as managers, policy makers, shareholders, etc., in that firm-specific and macro-economic factors are essential for managing the status of financial distress. [ABSTRACT FROM AUTHOR] |
| PLink | https://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=ent&AN=175755992 |
| RecordInfo | BibRecord: BibEntity: Identifiers: – Type: doi Value: 10.1186/s13731-024-00369-5 Languages: – Code: eng Text: English PhysicalDescription: Pagination: PageCount: 23 StartPage: 1 Subjects: – SubjectFull: Insurance companies Type: general – SubjectFull: Business insurance Type: general – SubjectFull: Diversification in industry Type: general – SubjectFull: Bankruptcy Type: general – SubjectFull: Price inflation Type: general – SubjectFull: Psychological distress Type: general – SubjectFull: Ethiopia Type: general Titles: – TitleFull: Determinants of financial distress: evidence from insurance companies in Ethiopia. Type: main BibRelationships: HasContributorRelationships: – PersonEntity: Name: NameFull: Kebede, Tekalign Negash – PersonEntity: Name: NameFull: Tesfaye, Getahun Deribe – PersonEntity: Name: NameFull: Erana, Obsa Teferi IsPartOfRelationships: – BibEntity: Dates: – D: 28 M: 02 Text: 2/28/2024 Type: published Y: 2024 Identifiers: – Type: issn-print Value: 21925372 Numbering: – Type: volume Value: 13 – Type: issue Value: 1 Titles: – TitleFull: Journal of Innovation & Entrepreneurship Type: main |
| ResultId | 1 |
