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The Effect of Institutional Factors on the Profitability Risk in the Insurance Companies Listed in the Saudi Stock Market

Author

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  • Abdulaziz Mohammed Alsahlawi

Abstract

This paper conducted an investigation into the effect of institutional factors namely, leverage, capital market assets, and firm size on the risk of profitability among Saudi insurance companies listed in the Saudi Stock market (Tadawul). The paper also determined if the institutional theory has a significant impact on the profitability risk of Saudi insurance firms. On the basis of the findings from the multiple regression analysis that was conducted on the data obtained, the study’s institutional factors namely, leverage, capital market assets, and firm size had a significant relationship with the return on assets of the Saudi insurance companies, which in turn, increased their profitability. In other words, the findings supported the contribution of leverage, capital market assets and firm size to the profitability of Saudi insurance companies and provided considerable directions as to developing a strategy of profitability among the companies.

Suggested Citation

  • Abdulaziz Mohammed Alsahlawi, 2018. "The Effect of Institutional Factors on the Profitability Risk in the Insurance Companies Listed in the Saudi Stock Market," International Business Research, Canadian Center of Science and Education, vol. 11(7), pages 12-19, July.
    • Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:7:p:12-19
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    References listed on IDEAS

    as
    1. Javier García-Cicco & Enrique Kawamura, 2014. "Central Bank Liquidity Management and “Unconventional” Monetary Policies," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2014), pages 39-87, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    institutional factors; profitability risk; insurance companies; Saudi Arabia;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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