Does Insurance Matter for Corporate Firm in Malaysia? Evidence from a Pooled Data of Takaful and Conventional Insurance
The objective of this study is to investigate the factors affecting corporate demand for property takaful and insurance using data of non-financial firms listed on the main board of Bursa Malaysia. Corporate demand for general takaful and insurance products has continuously risen, evident by the...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Universiti Sains Islam Malaysia
2012
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| Subjects: | |
| Online Access: | http://ddms.usim.edu.my/handle/123456789/5354 |
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| Summary: | The objective of this study is to investigate the factors affecting corporate
demand for property takaful and insurance using data of non-financial firms
listed on the main board of Bursa Malaysia. Corporate demand for general
takaful and insurance products has continuously risen, evident by the
increasing value in premiums collection of general insurance and takaful. Over
50 percent of total general insurance and takaful premiums were contributed
by business corporations. A pooled data on the corporate demand for takaful
and conventional insurance were used in this study. Panel data regression
models were employed for a five-year period from year 2002 to 2006. This
study finds that leverage, expected bankruptcy costs, firm size, managerial
ownership and tax consideration are the factors affecting corporate demand for
insurance in Malaysia. Our conclusions are robust to alternative specifications
of the model of GLS with Fixed Effects that help us to control for unobservable
heterogeneity. This study gives some important implications for various groups
like the insurers and takaful operators, shareholders and creditors as well as the
regulators in reflecting factors that determine the corporate demand for takaful
and insurance in Malaysia. |
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