Abstract:

The influence of market concentration on profitability is one of the most intriguing issues for financial organization researchers. Therefore, the purpose of the study is to investigate this potential impact in the context of insurance businesses operating in Jordan and Saudi Arabia. The research's main hypothesis is that increased market concentration boosts market profitability as a result of collaboration between dominant firms. We test this hypothesis by developing, estimating, and testing the model describing the impact of structural and other control variables on profitability using secondary panel data for 42 insurance firms between 2009 and 2019. We gathered information from 462 financial reports from insurance companies. As a consequence, multiple regressions were used to estimate the parameters of the model. The empirical results suggest that concentration indices and profitability have a bidirectional relationship, suggesting that past insurance industry concentration indices can explain current levels of profitability in Jordanian and Saudi insurance companies, and vice versa. Furthermore, the results of the research show that in Jordan and Saudi Arabia, there is a negative relationship between insurance concentration and profitability levels.

Keywords:

Market concentration; Profitability; insurance industries.

How to Cite:

Mohannad Almajali. W Muhammad Zainuddin. Market Concentration and Profitability: Empirical Evidence from the Jordanian and Saudi Arabia Insurance Industries. [ref]: vol.21.2023. available at: https://refpress.org/ref-vol21-a127/