Keywords: non-life insurance; capital structure; leverage; tradeoff theory; pecking order theory 2021 Industrija 49(1) What drives the capital structure? The case of non-life insurance companies in Serbia application/pdf 799975 bytes http://creativecommons.org/licenses/by-sa/4.0/legalcode info:eu-repo/semantics/article https://phaidrabg.bg.ac.rs/o:28431 doi: receiv ISSN: 0350-0373 Abstract: This paper studies the factors behind the capital structure of insurance companies. We used financial reports of non-life and composite insurance companies in Serbia between 2006 and 2019. In particular, we apply a panel-data approach to examine the relationship between leverage, defined as the ratio of technical reserves to capital and various firm-level characteristics. The coefficients estimated using the individual fixed-effects model indicate a significant and negative influence of profitability, growth and liquidity measures on leverage and a significant and positive influence of company size. The results indicate that the tradeoff theory and the pecking order theory are relevant in explaining the non-life insurer capital structure in Serbia. eng Božović, Miloš Koprivica, Marija