Investigation of the Relationship between Corporate Governance and Capital Structure in Insurance Companies with Panel Regression Analysis

Abstract

Corporate governance principles in a company consist of fairness, transparency, accountability and responsibility. Companies with fully implemented corporate governance principles are expected to reduce costs and increase corporate value. It is believed that increasing corporate value can be achieved by minimizing the cost of capital. When examined from these aspects, the value of the enterprise can be increased by reducing capital costs with corporate governance principles in this study, the relationship between the corporate governance of insurance companies and their capital structures has been examined. Financial indicators of insurance companies traded in Borsa Istanbul from 2014 to 2021 are used as data. The financial leverage ratio (total debt/total assets) is considered as the dependent variable and the proportion of foreign members, the proportion of female members, and the proportion of independent members as dependent variables are considered as independent variables in the study. Panel regression analysis was applied as the evaluation method, and it was seen that the ratios of foreign members, independent members and female members positively affected the capital structure. It has also been observed that the variable that most influences the capital structure is the proportion of foreign members.