Company’s Characteristics and Capital Structure “An Empirical Study on Listed Insurance Companies in Jordan”

Abstract

This study examined the company’s characteristics that affect the capital structure of insurance companies in Jordan. The study has employed panel regression model in investigating the capital structure of insurance companies using financial statements data of 23 companies covering the period 2010-2014. The results showed that both the static trade-off and pecking order theories are important in explaining the capital structure of insurance companies in Jordan. Company’s characteristics: size, profitability, tangibility, growth and risk were statistically significant to capital structure. Based on multiple and single regression the results of the study showed a statistical significant relationship between characteristics of insurance companies and their capital structure. The results also revealed a significant negative relationship between capital structure and company’s size, profitability, growth and risk while tangibility was significantly positively correlated to capital structure.