Companies In Nepal Research Articles

Financial Performance of Life Insurance Companies of Nepal

This study aims to analyze the financial performance of life insurance companies in Nepal and examine the effect of operating efficiency on solvency margin position and operating profit margin of selected life insurance companies have been analyzed. The study revealed that a mixed result in terms of the degree of effect of financial performance on the operating efficiency. There are both significant and insignificant effects of solvency margin and operating profit on operating efficiency of both sample insurance company. There are still major hurdles to overcome in order for Nepal to realize the growth potential of its insurance industry. Research could be conducted on the growth in the written premiums accounted by insures. The design and methods were applied according to the research type which is descriptive analysis. The data was extracted from annual reports and Nepal Beema Sasthan office. The findings were completely based on the data and facts. Secondary data were collected for analysis from 2010/11 to 2020/21 to find the financial performance, descriptive and causal-comparative research designs was employed for analysis secondary data. Different statistical tools like; standard deviation, correlation coefficient, multiple regression analysis, etc. and financial tools like ratio analysis, solvency ratio, earning per share, total assets, return on assets, insurance premium were used to evaluate the secondary data obtained from secondary sources. The findings of the research have shown the overall calculated financial ratios are good enough for better financial performance of selected life insurance companies in Nepal.

Investing in Human Capital Management for Firm Performance: Liability or Strategic Alignment?

A firm’s sustainable performance is a burgeoning issue globally. It is the strategic choice of the firm whether it should invest in its human resources. This study examines the role of human capital management in determining firm performance. HR competencies, HR practices, HR systems, and HR deliverables were selected as the dimensions of human capital management. Employee satisfaction was the mediating variable. Data were collected from a survey of conveniently selected 305 employees of purposively selected life insurance companies in Nepal. The results of the study revealed a positive significant impact of each component of human capital management and overall human capital management on firm performance, concluding that investment in human capital management is the strategic alignment rather than the liability. Firms investing more in human capital enhance their financial performance for sustainable growth. This study contributes to elaborating the resource-based view for creating dynamic capability of resources from effective development and mobilization of human resources.

INTERNAL CONTROL SYSTEM IN ENHANCING THE CORPORATE GOVERNANCE IN LISTED INSURANCE COMPANIES IN NEPAL

This study aims to show the role of internal control in enhancing the corporate governance of insurance companies in Nepal. To attain the study’s objectives, four independent variables risk assessment, monitoring and supervision, control environment, and internal audit have been considered as well three dependent variables independent directors, transparency, and responsibility are taken. A descriptive research design has been used in the study. Fifteen insurance companies in Nepal have been chosen using the convenience sampling technique. Primary data has been collected from the staff of insurance companies in Nepal. A total of 384 respondents’ information is used in the research. Descriptive and inferential statistics are used for data analysis using SPSS and Excel software. Based on the result of the analysis, it was found that risk assessment elements positively enhance the corporate governance elements of transparency and responsibility. Elements of monitoring and supervision have a positive role to enhance the independent directors and transparency but a negative role on responsibility. Likewise, a controlled environment enhances the independent directors in a positive direction. Internal audit positively enhances the independent directors but responsibility has been affected negatively. The success of corporate governance is affected by the internal control activities in insurance companies in Nepal.

HRM Practices and its Impact on Customer satisfaction Pharmaceutical Companies in Nepal

This paper aims to investigate the impact of HRM practices on employee satisfaction in the pharmaceutical companies of Nepal A structured questionnaire was developed and distributed amoung386 employees of 37pharmaceuticals companies. Statistical correlation analysis was used to assess the impact of HRM practices on Customer satisfaction. The study reveals that employees in pharmaceutical companies are satisfied with the recruitment and selection, and training and development policy and practices of pharmaceutical companies. On the other hand, employees are dissatisfied with the human resource planning, working environment, compensation policy, performance appraisal, and industrial relations. The study suggests that the pharmaceutical companies should develop proper human resource policy and given emphasis on proper human resource practices to enhance the satisfaction of their customer and build them effective human resources. Keywords: Human resource management practice, Pharmaceutical company Nepal

Cost estimation of micro-hydropower equipment in Nepal

Selecting the appropriate technology for providing electricity to rural communities depends upon evaluating the cost of a potential installation. For some rural communities, locally manufactured technology, in the form of wind and hydropower, can be effective. However, often the cost of these locally manufactured technologies is largely unknown. Access to costing data allows the economic viability of a site to be compared with other options. Furthermore, it enables benchmarking, allowing the expected total cost of an installation, or individual sub-systems, to be compared with quotations. This paper attempts to address the current lack of publicly available costing information for locally manufactured micro-hydropower equipment. A methodology is presented where quotations are provided by micro-hydropower manufacturing companies in Nepal for randomly generated sites. Using that information, they provided a quotation for various sub-systems. This data allows comparison of the cost of major components and the influence of turbine type. Through a linear regression model, expression have been developed that can be used to determine the expected cost for both Pelton and Crossflow turbine installations. The accuracy of these expressions is compared with previous costing models, the outcomes of the work and their significance in the context of Nepal and elsewhere is discussed. The key contribution of this work is establishing numerical expressions which allow proposed costs of micro-hydropower equipment to be rapidly evaluated.

HRM Practices and its Impact on Customers’ Satisfaction of Pharmaceutical Companies in Nepal

This paper aims to investigate the HRM practices and impact on Customers satisfaction in the pharmaceutical companies of Nepal A structured questionnaire was developed and distributed among 386 employees of 37 pharmaceuticals companies. Statistical correlation analysis was used to assess the impact of HRM practices on Customer satisfaction. The study reveals that employees in pharmaceutical companies are satisfied with the recruitment and selection, and training and development policy and practices of pharmaceutical companies. On the other hand, employees are dissatisfied with the human resource planning, working environment, compensation policy, performance appraisal, and industrial relations. The study suggests that the pharmaceutical companies should develop proper human resource policy and given emphasis on proper human resource practices to enhance the satisfaction of their customer and build them effective human resources.

Impact of premium collection on investment pattern of Nepalese life insurance companies

The premium collection is one of the main sources for investment and measuring profitability of insurance companies. This research aims to analyze the effect of premium collection on the investment strategy and profitability of the life insurance company. Only four insurance companies have been selected out of the nineteen life insurance companies in Nepal using simple random sampling technique. The purpose of this descriptive and causal-comparative study is to examine the impact of premium collection on investment and profitability in life insurance companies. Both primary and secondary data have been incorporated. Descriptive statistical tools consist of mean, standard deviation, coefficient of variation as well as the inferential statistic consists of correlation and regression analysis as secondary data variables. The findings indicate a positive and significant relationship between total investment and premium collection in the life insurance industry. Additionally, premium collection shows significantly positive relationships with earnings per share and net profit. However, the research also suggests an insignificant relationship between premium collection and return on assets (ROA) and return on equity (ROE). Furthermore, the study highlights the influence of various other factors on premium collection and investment patterns, including firm size, government regulations, investment duration, investment period, and investment objectives. Understanding these factors can aid in formulating an effective structure for premium collection and investment strategies to achieve higher profitability. The research findings shed light on the significance of premium collection in guiding investment decisions in the life insurance sector. The findings of this study can contribute to the formulation of effective premium collection and investment strategies to maximize profits in this industry.

Nexus between Capital Structure and Financial Performance of Nepalese Hydropower Companies

This study aims to shed light on the empirical investigation of the nexus between capital structure and financial performance. This paper focuses on hydropower companies listed on Nepal Stock Exchange (NEPSE) until mid-July 2020. This paper analyzes the nexus of capital structure with the financial performance of hydropower companies for the period 2005/06 to 2019/20. This study applies a descriptive and causal research design. Return on equity (ROE) is used to measure financial performance and is considered a dependent variable and short-term debt to capital (SDC), long-term debt to capital (LDC), total debt to capital (TDC), and debt to assets (DR) ratios are the measures of capital structure and used as explanatory variables. This paper reveals that short-term debt to capital ratio has a positive role in financial performance. Moreover, the findings of this paper depict that long-term debt to capital and total debt to capital has a significant positive impact on the financial performance of hydropower companies in Nepal. However, the debt to asset ratio inversely affects financial performance. Thus, this paper concludes that Nepalese hydropower companies should increase short-term, long-term, and total debt to capital ratios and decrease debt to assets to maximize financial performance. The implication of this study is in the formulation of optimal capital structure policy. The hydropower sector can apply the findings of this paper to formulate an appropriate capital structure policy to maximize its financial performance in Nepal.

Impact of Firm Specific Factors on Financial Performance: A Comparative Study of Life and Non-Life Insurance Companies in Nepal

The empirical research has been carried out to examine the firm specific factors composition and its impact on financial performance of life and non-life insurance companies in Nepal. This paper employs the descriptive as well as causal-comparative research design. The study comprises of a panel data set of 14 insurance companies listed in Nepal Stock Exchange (NEPSE) with 140 observations covering a period of 10 years from 2009/10 to 2018/19. The result exhibits that the insurance companies having a high debt ratio have better financial performance. It also reveals that a higher proportion of debt ratio and tangible assets increases return in assets. On the other side, a lesser proportion of equity, firm size and liquidity decreases the return on assets of the insurance companies in Nepal. The study raises understanding of impacts of firm specific factors on financial performance and provides an empirical evidence that the total debt ratio, equity to the total assets ratio, leverage, firm size, liquidity and tangibility are the significant factors in determining the financial performance of Nepal’s insurance companies. The non-life insurance companies tend to perform better in term of financial performance measured by earning per share and return on assets. The study leads to practical implications for insurance companies and regulatory bodies. The insurance companies of Nepal interested to improve their financial performance should focus on increasing their leverage and long-term investment and decreasing the proportion of equity, firm size and liquidity.

The effects of internal, external and aggregated CSR practices on the firm's reputation and profitability

PurposeContemplating the concerns often expressed by skeptics about the value generated by corporate social responsibility (CSR) practices, this study aims to examine the effects of CSR practices on the firm's reputation and profitability in the distinct socio-economic context of Nepal.Design/methodology/approachThe study used a simple random sampling method in collecting data from 168 listed companies in Nepal. The data were collected using structured questionnaires. Then, hierarchical multiple regression analyses were used to test the stated hypotheses.FindingsResults showed that all types of CSR practices positively affect the firm's reputation and profitability. However, a firm's reputation was better explained by the external CSR practices, and profitability was better explained by the internal CSR practices. Moreover, CSR practices were more strongly linked with the firm's reputation than profitability.Research limitations/implicationsPerceptual data on profitability may be seen as a limitation although it can capture the current profitability situation as well as a future prospect within a single construct.Practical implicationsPracticing managers can consider CSR as an important strategic issue to stay ahead in competition rather than simply a response to regulatory requirements or stakeholder pressures.Originality/valuePerhaps this is the first study to examine the effects of internal CSR practices, external CSR practices, and aggregated CSR practices separately on the firm's reputation and profitability in the unique socio-economic context of Nepal.

Impact of Corporate Citizenship Activities on the Financial Performance of the Nepalese Life Insurance Companies

Corporate Citizen Activities (CCA) is essential for any organiztion to attract and retain customers, and to beat the competition. CCA are the indirect and intangible assets of organizations and their response is a key indicator to achieve organizational goals. This paper attempts to examine the impact of corporate citizenship activities on the financial performance of Nepalese insurance companies. Descriptive and causal-comparative research designs are used to estimate the relationship of financial performance, the ROA and the NI (dependent variables) with independent variables (economic responsibilities, legal responsibilities, ethical responsibilities, and discretionary responsibilities). Data are collected from 325 respondents of 19 life insurance companies through structured questionnaires where the questionnaire was distributed to 500 respondents (the response rate is 65 per cent). Descriptive statistics, correlation, and multiple regression models are used to analyse the data. It is found that legal responsibility and discretionary responsibility are the major factors in determining the financial performance of insurance companies in Nepal. CCA helps to bust up the return in terms of profit.

Factors Affecting Profitability of Nepalese Non-Life Insurance Companies

The study examines the impacts of liquidity ratio, leverage ratio, firm size, age of the firm and total debt on the profitability of non-life insurance companies in Nepal. The dependent variable in the study is the return on asset (ROA), which is used as a measure of profitability. The study is based on secondary data of nine non-life insurance companies studied over a period of ten years, from 2066/67 to 2075/76. The data were collected from the financial statements published annually by the selected non-life insurance companies. Descriptive statistics, correlational analysis and regression models have been employed in order to test the impacts as well as the significance of the selected independent variables on ROA. The study concludes that the profitability of Nepalese non-life insurance companies increases with the increase in liquidity but decreases with the increase in leverage. However, the study establishes the insignificant relationship of firm size, firm age and total debt with profitability for the sector. The study thus suggests that non-life insurance companies should focus on the proper management of capabilities to pay liabilities to enhance profitability and also try to maintain a smaller value of leverage ratio to handle the above-average losses.

Factors Driving Stock Prices of Nepalese Insurers

The effect of firm-specific and macroeconomic factors on the price-earnings ratio of Nepalese insurance companies is analyzed in this study using pooled cross-sectional data. The study covers a period of eight years (2007/08 to 2014/15) and uses secondary data from 13 insurance companies with a total of 104 observations. The findings suggest that firm size, money supply, and gross domestic product have a positive correlation with stock prices, while inflation has a negative correlation. Furthermore, size, gross domestic product, and money supply have a positive impact on the price-earnings ratio, whereas dividends per share, book value per share, return on equity, and inflation have a negative impact. The study's results have important implications for insurance companies in Nepal, particularly in making investment decisions and formulating pricing strategies. The research's analytical techniques and strategies can be applied to different facets of the Nepalese stock market.

Capital Structure and its Impact on Financial Performance in Insurance Companies of Nepal

The paper attempts to examine the relationship between capital structure and the financial performance of Nepalese insurance companies. Return on assets and earnings per share are the dependent variables. Independent variables are total debt ratio, equity to total assets ratio, size, liquidity and tangibility. This paper uses descriptive as well as causal-comparative research design to examine the general structure of capital structure and financial performance and their relationship. The data were collected from annual reports of listed insurance companies in Nepal. The study is based on 84 observations from 14 insurance companies of Nepal from 2013/14 to 2018/19. The regression models are estimated to test the effect on financial performance variables i.e. return on assets and earnings per share. The result shows that insurance companies having a high debt ratio have better financial performance. An increase in debt ratio and tangibility increase return on assets and an increase in equity, size and liquidity decrease return on assets in the industry. The impact of the debt ratio and tangibility on earning per share is positive and there is the negative impact of equity, size and liquid ratio on earning per share. The major conclusion of this study is that total debt ratio, equity to total assets ratio, leverage, size, liquidity and tangibility are the significant factors in determining the financial performance of Nepalese insurance companies. The insurance companies of Nepal interested to increase financial performance can increase their total debt ratio and tangible assets and decrease equity, firm size, and liquidity ratio.

Impact of Firm Specific Factors on Financial Performance of Life Insurance Companies in Nepal

The financial performance of life insurance companies determines the company’s ability to generate revenues and manage assets, liabilities and the financial interests of its stakeholders. However, there are limited studies discoursing major determinants of companies’ financial performance. To fulfill the gap, this study aimed to determine the effects of various firm-specific factors - firm size, liquidity ratio, short-term debt, long-term investment and firm age - on financial performance of life insurance companies in Nepal. The dependent variables influencing financial performance considered were return on assets (ROA) and return on equity (ROE). The study was based on secondary data of seven life insurance companies studied over a period of ten years, from 2009/10 to 2018/19. The data were collected from the financial statements published annually by the selected life insurance companies, Insurance Board of Nepal and Nepal Stock Exchange. In order to derive the impacts of firm-specific variables on ROA and ROE, descriptive statistics, correlation analysis and regression models were used. The study identified size and long-term investment to have negative and statistically significant relationship with financial performance. It also showed that higher the age of the company, the more difficult it will be to accumulate profit. The most influencing factors for the financial performance in Nepalese life insurance companies were firm size and long-term investment. Whereas, the explanatory power of liquidity seemed feeble. The findings elucidated that over-investment in long-term investments should be critically considered as it can have adverse effect on future profitability of the companies. Similarly, life insurance companies should increase their size only after careful examination over financial performance as it can result in diseconomies of scale and reduce the firm’s profitability.

Comparative Functional HRM Practices in Nepalese Banking and Insurance Companies

The main objective of this research is to examine the core aspects of the practices of functional human resource management (HRM) in Nepalese commercial banks and insurance companies. This research is focused on primary sources of data. Data was gathered from 10 commercial banks and 10 insurance companies of Nepal by creating a set of questionnaires and distributing these questionnaires to the officer-level employees of each of the commercial banks and insurance companies. The findings point out that there are significant differences between commercial banks and insurance companies in functional HRM practices in terms of employee selection and placement and in the management of pay & bonus schemes. Commercial banks are often found to typically have a higher level of HRM practices, while insurance companies have a lower level of HRM practices. There is a possibility of the mobility of human resources from insurance companies to commercial banks. Therefore, both commercial banks and insurance companies in Nepal must ensure that investment in their human resources and HRM practices definitely attract and retain competent people from the job market. Keywords: Human resource management, Employees, Practices, Commercial banks, Insurance companies DOI: 10.7176/EJBM/12-30-01 Publication date: October 31 st 2020

Effects of Capital Structure on Financial Performance of Insurance Companies in Nepal

The study has examined the effects of capital structure on financial performance of insurance companies in Nepal. Data were collected from the annual report of the respective insurance companies' web site. The panel data of 14 Nepalese insurance companies from 2007/08 to 2015/16, leading to a total of 126 observations. The data were analyzed using pooled OLS model, random effect model and fixed effect model. The study has been return on assets as dependent variable whereas total debt ratio, equity to total assets, leverage, firm size, liquidity ratio and assets tangibility are independent variables. The result concluded that equity to total assets, leverage, and assets tangibility have effects the financial performance in Nepalese insurance companies' cases.

Effect of Government Budget Announcement on Stock Returns: Evidence from Nepal Stock Exchange

This study examines the effect of government budget announcement on stock return of selected companies listed at Nepal Stock Exchange. For this purpose, secondary data of 48 companies are used over the study period from 5th November 2018 to 30th June 2019 and analyzed using the event study methodology with an estimation period of 120 days and event window of 41 days. The market model has been used to predict expected stock returns and use of regression technique helps to find the constant parameters of the regression equation. Calculations of AAR and CAAR are done to make sense of the aggregate effect of the government budget announcement on stock returns. Student’s t-statistics of AAR and CAAR have provided the evidence that there is a positive effect of government budget announcement on stock returns of selected companies in Nepal.

Corporate Social Responsibility and Its Impact on Brand Building: Special Reference to Employees of Selected Companies in Nepal

This study identifies the impact of corporate social responsibility (CSR) and its impact on the branding of the company. Many business companies in Nepal have integrated CSR and philanthropic activities into day-to-day operations. The realization of social responsibility has led them to share their profit with humanity and getting engaged in various areas of social well-being. The result shows employees perceive a significant association on the branding of the company especially in the areas of social/community service, ethical, health, environmental and education activities.

The Effect of Corporate Governance and Ownership Structure on Financial Performance of Listed Companies in Nepal

The paper attempts to analyze relationships among corporate governance, ownership structure and firm performance in Nepal. The study comprises of panel data set of 25 firms listed at Nepal Stock Exchange (NEPSE) covering a period of five years from 2012 to 2016. The econometric methodology for the study consists primarily of least squares dummy variable (LSDV) model, fixed and random effects panel data models and two-stage least squares (2SLS) model. The study finds bi-directional relationship between corporate governance and performance. Among corporate governance internal mechanisms; smaller board size, higher proportion of independent directors, reducing ownership concentration, improving standards of transparency and disclosure, and designing appropriate director compensation package are important dimensions that listed firms and regulators in Nepal should focus on. Ownership concentration is found to have positive effect on performance; however, it affects corporate governance negatively. This study raises understanding and provides empirical evidence for endogenous relationship between corporate governance and performance and offers support for principal-principal agency relationship. The results of this study lead to several practical implications for listed firms as well as policymakers of Nepal in promoting sound corporate governance practices and codes. For listed companies, the improvement in compliance with a code of corporate governance or voluntary adoption of best practices can provide a means of achieving improved performance.