The Determinants of Capital Structure of Insurance Companies: Evidence from Emerging Markets

This study aims to investigate the factors affecting the capital structure of insurance companies in Palestine and Jordan. A linear model between the theoretically defined attributes of an insurance company and its capital structure is calculated using balanced panel data from 27 active insurance firms in Palestine and Jordan from 2012 to 2021. The leverage of Palestinian and Jordanian insurance enterprises is found to be negatively correlated with their size, profitability, liquidity, solvency, and tangibility. The data generally support the pecking order hypothesis. According to the results, information asymmetry is the most influential element in the financing decisions of insurance firms. Boards of directors and policymakers must work harder to increase the transmission of information and increase confidence in the information revealed. Yet, the study's sample size is insufficient to extend the results to other contexts.