Exchange Rate Misalignment and Insurance Industry Performance in Nigeria
Abstract
The study examines the impact of the Exchange Rate Misalignment on Insurance Industry in Nigeria. A sample of 28 firms is used for the period 2007-2018 comprising 336 annual observations. To achieve the objective of the study, the research utilises secondary data from the financial audited accounts of insurance firms obtained from the Nigerian Stock Exchange (NSE). The dependent variable is captured using deviation from the average equilibrium exchange rate and insurance industry performance is measured using investment income. A static panel is employed for the analysis, the observations from each firm are stacked following by first estimating the pool regression model while fixed effect is employed to remove misspecification. The results reveal that the financial performance of insurance industry is influenced by the misalignment of the Exchange rate.
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