The mediating role of net working capital in the relationship between market power and the performance of the insurance industry in Palestine

Abstract

This study aims to examine market power theories and their role in explaining the performance of the insurance industry in Palestine with the presence of the mediating role of net working capital. Based on the data available for (7) companies during the period (2010-2020), and using standard Models; Market power theories are able to explain the returns of the Palestinian insurance sector. Accordingly, these results deny the influence of monopoly in the structure of the insurance sector on the performance of these companies, and the impact of traditional efficiency on its performance. The insurance sector in Palestine is characterized by acceptable competitiveness, and this is confirmed by the pivotal role of net working capital in enhancing the returns of these companies. The study recommends the need for insurance companies to focus on enhancing their operational capabilities and directing the largest volume of their growing assets to support working capital. This leads to achieve prominent role in the performance of this industry. The future research remains on identifying the role of economic efficiency theories in explaining the returns of the insurance sector in Palestine.