Board Composition and Insurance Firm Performance: Evidence from Emerging Markets

Sarkar Kabir, Rashedul Hasan, Md Hamid Uddin

Research output: Working paper

Abstract

This study aims to investigate how corporate governance impacts the performance of insurance companies in two emerging markets: Malaysia and Bangladesh. We employ the Generalized Method of Moments (GMM) based panel regression on the annual data from 54 insurance companies over 2012 and 2016. The findings of the study show that governance mechanism has a significant impact on the performance of the insurance companies under review. Increase of independent members of the board has a negative influence on the financial performance of Malaysian insurance companies while such relationship is not statistically significant for insurance companies in Bangladesh. Additionally, findings suggest that board size has a significant positive impact on the financial performance of the insurance companies. Finally, the study provides new evidence on agency relationship for insurance firms in emerging markets and contributes to the literature by addressing the fact that the increased involvement of non-executive members on the board of insurance companies might lead to poor financial performance. Findings of this study can provide guidance to regulators in designing governance mechanism that caters for insurance firms.
Original languageEnglish
Number of pages27
Publication statusIn preparation - 2019

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Emerging markets
Board composition
Insurance companies
Insurance
Firm performance
Financial performance
Governance mechanisms
Bangladesh
Panel regression
Agency relationship
Guidance
Board size
Generalized method of moments
Malaysia
Corporate governance

Keywords

  • Generalized Methods of Moments, Governance, Performance, Insurance

Cite this

Board Composition and Insurance Firm Performance: Evidence from Emerging Markets. / Kabir, Sarkar; Hasan, Rashedul ; Uddin, Md Hamid .

2019.

Research output: Working paper

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