Non-life insurance companies are an important part of the financial system in any country. Constant development and financial sustainability of these institutions is key to foster the rapidly growing economic activities of emerging economies like Bangladesh. This study made an attempt to establish the impact of different firm-specific factors on profitability using the non-life insurance sector in Bangladesh. A thriving insurance industry, especially in the non-life sector, can accelerate economic growth by mobilizing large funds and providing risk-hedging services to economic activities. This paper investigates the temporary and permanent impact of different firm-specific factors on financial performance, using the case of the non-life insurance sector in Bangladesh: one of the fastest growing economies in the world. Using panel data on 16 non-life insurance companies from 1999 to 2014, this paper utilizes both Static Panel Data (SPD) and Dynamic Panel Data (DPD) estimation techniques. For DPD estimation, a Pooled Mean Group (PMG) estimator built on an ARDL Framework that can produce short run and long run impacts separately has been employed. In addition to the average impact generated from static estimations, this paper identifies the significant impact of all variables on profitability in the long-term (those of a permanent nature) while the investment ratio shows some impact in the short-term (those of a temporary nature). The results of the study indicate that the average impact is predominantly derived from the long-term and thus appear to be permanent in nature. Moreover, investment ratio contributes positively to profitability, mostly in the short-term (temporarily) with some effects in the long-term. The findings on liquidity and investment ratio suggest the permanent nature of their impact on profitability in the long-term and, hence, insurers are probably better served investing funds in short-term opportunities (e.g. investing in securities) rather than in long-term ones. Lastly, the empirical results regarding the impact of leverage is not clear, as it shows mixed impact in two different estimations, including the permanent nature of negative impact in the long-term. The non-life insurance companies of Bangladesh should implement strong policies to reduce the faulty underwriting procedures to improve the profitability. This paper offers significant contributions to the literature by separately identifying the 'temporary' and 'permanent' impact of several determinants, thereby producing novel estimations for Bangladesh that may have implications for other emerging economies.
Internationalization of banking institutions has been more evident to a greater extent recently due to the advancement of technology and global inter-connectedness of the business world. As the "engine of economic growth" banks are the dominant players in Bangladesh financial market. Due to quick market saturation, highly competitive domestic market and need for innovation, banks in Bangladesh are tending to move towards international market. Using six financial performance measures and five internationalization variables, this paper examines the impact of different internationalization dimensions on financial performance of the banks. The study estimates 18 models on panel data of 35 scheduled banks for 2005 to 2014 using Dricoll-Kraay, Prais-Winsten alongside Fixed and Random Effect estimation techniques. Findings suggest that net effect of internationalization is on average negative for all banks however it is significantly negative for the SOBs compared to PCBs. The paper also finds that physical presence in foreign countries, level of internationalization banks place themselves and age of international operation have significant impact on most of the performance measures. This paper contributes to existing literatures by: using new dimensions to define internationalization, examining impact on six different performance measures, being the first study on internationalization of Bangladeshi banks, and generating some unique findings.