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Int. J. Financial Stud. 2016, 4(1), 4; doi:10.3390/ijfs4010004

The Efficiency of the European Non-Life Insurance: CEO Power, Macroeconomic, and Market Characteristics Impact

1
Governance, Finance and Accounting Laboratory, Faculty of Business and Economics, University of Sfax, Sfax 3018, Tunisia
2
Faculty of Business and Economics, University of Sfax, Sfax 3018, Tunisia
*
Author to whom correspondence should be addressed.
Academic Editor: Nicholas Apergis
Received: 21 October 2015 / Revised: 16 December 2015 / Accepted: 15 January 2016 / Published: 1 March 2016
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Abstract

A numbers of studies focusing on the determinant of the insurance market efficiency have increased in the last decade. In fact, many factors, like the CEO’s power, can influence the efficiency in the insurance firm. The purpose of this research is to analyze the relationship between efficiency, measured by the cost function using the stochastic frontier approach (SFA) methodologies, and the market structure, as well as the macroeconomic variables. In addition, it focuses on identifying the impact of the integration of the CEO power variable in the cost function on this relation. The result shows that after the consideration of the CEO power score in the cost efficiency, the relation between insurance efficiency and the determinant of market development, as well as the domestic economy, has changed and become more significant. The result also shows that the firms become more efficient and more profitable with a higher concentration ratio and this is in accordance with the structure-conduct-performance (SCP) theory. View Full-Text
Keywords: insurance; efficiency; CEO power; market structure; domestic economy insurance; efficiency; CEO power; market structure; domestic economy
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Bahloul, W.; Bouri, A. The Efficiency of the European Non-Life Insurance: CEO Power, Macroeconomic, and Market Characteristics Impact. Int. J. Financial Stud. 2016, 4, 4.

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