Foreign ownership, efficiency and solvency: analysis of takaful firms in the GCC region

The financial sector regulatory reforms undertaken by the respective governments of the GCC countries in recent years have liberalized their financial policies and encouraged the influx of foreign-owned firms participating in the Takaful market. This development among others has created a competitiv...

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Main Authors:	Adewale, Abideen Adeyemi, Hamid, Zarinah, Asafa, Dauda Adeyinka
Format:	Article
Language:	English English
Published:	ISTAC 2015
Subjects:	HG Finance HG4301 Trust services HG8011 Insurance
Online Access:	http://irep.iium.edu.my/47146/ http://irep.iium.edu.my/47146/ http://irep.iium.edu.my/47146/1/08._ADEWALE_ABIDEEN.pdf http://irep.iium.edu.my/47146/4/47146_foreign_ownership_WOS.pdf

id	iium-47146
recordtype	eprints
spelling	iium-471462016-07-17T07:34:42Z http://irep.iium.edu.my/47146/ Foreign ownership, efficiency and solvency: analysis of takaful firms in the GCC region Adewale, Abideen Adeyemi Hamid, Zarinah Asafa, Dauda Adeyinka HG Finance HG4301 Trust services HG8011 Insurance The financial sector regulatory reforms undertaken by the respective governments of the GCC countries in recent years have liberalized their financial policies and encouraged the influx of foreign-owned firms participating in the Takaful market. This development among others has created a competitive environment for continuous growth and impressive performance of the sector. This paper attempts to examine the efficiency of foreign-owned, vis-à-vis, the domestic owned, Takaful firms while taking into consideration the financial soundness of each Takaful firm. Mathematical programming non-parametric data envelopment analysis (DEA) with range adjustment measures (RAM) are utilized for analyzing 80 selected Takaful firms operating in the region for a 4-year period (2009-2012). Subsequent investigation is conducted using non-parametric statistical measure (Mann Whitney U rank statistics) and latent growth curve modeling to determine the statistically significant differences between the two. Result shows difference in efficiency between the foreign owned and domestically owned Takaful firms in years 2010 and 2012 for the models that include and exclude solvency ratio respectively. The result is actually consistent with the proposition of the global advantage hypothesis which also clearly demonstrates that solvency ratio has moderating influence on the efficiency differences. ISTAC 2015-12 Article PeerReviewed application/pdf en http://irep.iium.edu.my/47146/1/08._ADEWALE_ABIDEEN.pdf application/pdf en http://irep.iium.edu.my/47146/4/47146_foreign_ownership_WOS.pdf Adewale, Abideen Adeyemi and Hamid, Zarinah and Asafa, Dauda Adeyinka (2015) Foreign ownership, efficiency and solvency: analysis of takaful firms in the GCC region. Al-Shajarah (SpeciaI Issue). pp. 173-204. ISSN 1394-6870 http://journals.iium.edu.my/shajarah/index.php/shaj/index
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English
topic	HG Finance HG4301 Trust services HG8011 Insurance
spellingShingle	HG Finance HG4301 Trust services HG8011 Insurance Adewale, Abideen Adeyemi Hamid, Zarinah Asafa, Dauda Adeyinka Foreign ownership, efficiency and solvency: analysis of takaful firms in the GCC region
description	The financial sector regulatory reforms undertaken by the respective governments of the GCC countries in recent years have liberalized their financial policies and encouraged the influx of foreign-owned firms participating in the Takaful market. This development among others has created a competitive environment for continuous growth and impressive performance of the sector. This paper attempts to examine the efficiency of foreign-owned, vis-à-vis, the domestic owned, Takaful firms while taking into consideration the financial soundness of each Takaful firm. Mathematical programming non-parametric data envelopment analysis (DEA) with range adjustment measures (RAM) are utilized for analyzing 80 selected Takaful firms operating in the region for a 4-year period (2009-2012). Subsequent investigation is conducted using non-parametric statistical measure (Mann Whitney U rank statistics) and latent growth curve modeling to determine the statistically significant differences between the two. Result shows difference in efficiency between the foreign owned and domestically owned Takaful firms in years 2010 and 2012 for the models that include and exclude solvency ratio respectively. The result is actually consistent with the proposition of the global advantage hypothesis which also clearly demonstrates that solvency ratio has moderating influence on the efficiency differences.
format	Article
author	Adewale, Abideen Adeyemi Hamid, Zarinah Asafa, Dauda Adeyinka
author_facet	Adewale, Abideen Adeyemi Hamid, Zarinah Asafa, Dauda Adeyinka
author_sort	Adewale, Abideen Adeyemi
title	Foreign ownership, efficiency and solvency: analysis of takaful firms in the GCC region
title_short	Foreign ownership, efficiency and solvency: analysis of takaful firms in the GCC region
title_full	Foreign ownership, efficiency and solvency: analysis of takaful firms in the GCC region
title_fullStr	Foreign ownership, efficiency and solvency: analysis of takaful firms in the GCC region
title_full_unstemmed	Foreign ownership, efficiency and solvency: analysis of takaful firms in the GCC region
title_sort	foreign ownership, efficiency and solvency: analysis of takaful firms in the gcc region
publisher	ISTAC
publishDate	2015
url	http://irep.iium.edu.my/47146/ http://irep.iium.edu.my/47146/ http://irep.iium.edu.my/47146/1/08._ADEWALE_ABIDEEN.pdf http://irep.iium.edu.my/47146/4/47146_foreign_ownership_WOS.pdf
first_indexed	2023-09-18T21:07:07Z
last_indexed	2023-09-18T21:07:07Z
_version_	1777411007047532544

Foreign ownership, efficiency and solvency: analysis of takaful firms in the GCC region

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