Abstract:
This thesis is designed to investigate Capital structure determinants towards Ethiopian
Insurance Industry. Thus, the major aim of this research was to investigate firm specific factors
such as, Asset Tangibility, Liquidity, Risk, Growth Opportunity, Profitability and Age of the firm
were impact on Ethiopian insurance companies. The panel data was used in this study to achieve
the research objectives. In this study, the researcher used only secondary data. To accomplish
this study, all insurance companies were included in the sample frame those had audited annual
reports of seven years. In order to accomplish these issues a quantitative research approach is
utilized by documentary analysis and the study uses seven (2008 up to 2014) years data for all
Insurance Companies those have full audited financial statements for seven consecutive years
This study applied panel or longitudinal data model with its fixed effect estimate regression to
test a series of the hypotheses that organized through the review of existing literature. Then the
data collected were analyzed by using: correlation and Ordinary least square model
After regression, the finding result shows that Asset Tangibility, Liquidity, Growth Opportunity
and Business Risk were direct or Positive relation with Leverage level; while the remaining two
variables (Profitability and Age of the firm) have negative relation with Leverage of Ethiopian
Insurance Industry. Among of the six variables, only three variables (Asset tangibility has
significant positive relation and both Profitability and Age of the firm were significant negative
impact)on Ethiopian Insurance Companies and the remaining three variables (Liquidity, growth
opportunity and business risk) found no significant effect on Capital structure determinants on
Ethiopian Insurance Companies.
