Development of the insurance sector and economic growth: an empirical analysis for 47 countries
Abstract
This paper studies the effect of the development of the life and nonlife insurance market on economic growth, as well as the conditions (degree of financial development, income and institutional environment) that affect the relationship between both variables. The Generalized Method of Moments (GMM) was used, with a dynamic panel data model for 47 countries between 1990 and 2014. Results indicate that there is a positive impact of the development of the insurance market on economic growth. In addition, the relationship between the insurance market and economic growth decreases in a relatively sounder institutional environment. On the other hand, the positive impact of the development of the insurance market on economic growth is mitigated in high-income countries.
Downloads
References
Arellano, M. & Bond, S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. The Review of Economic Studies, 58(2), 277-297. Recuperado de https://doi.org/10.2307/2297968
Arellano, M. & Bover, O. (1995). Another Look at the Instrumental-Variable Estimation of Error-Components Models. Journal of Econometrics, 68(1), 29-51. Recuperado de https://doi.org/10.1016/0304-4076(94)01642-D
Arena, M. (2008). Does Insurance Market Activity Promote Economic Growth? A Cross-Country Study For Industrialized and Developing Countries. The Journal of Risk and Insurance, 75(4), 921-946. Recuperado de http://dx.doi.org/10.1111/j.1539-6975.2008.00291.x
Barr, N. (2010). Long-term care: a suitable case for social insurance. Social Policy & Administration, 44(4), 359-374. Recuperado de http://dx.doi.org/10.1111/j.1467-9515.2010.00718.x
Blundella, R. & Bond, S. (1998). Initial Conditions and Moment Restrictions in Dynamic Panel Data Models. Journal of Econometrics, 87(1), 115-143. Recuperado de https://doi.org/10.1016/S0304-4076(98)00009-8
Chamberlain, D. Coetze, W., & Camargo, A. (2017). Funding the Frontier: The Link Between Inclusive Insurance Market, Growth and Poverty Reduction in Africa. Recuperado de http://cenfri.org/microinsurance/assuring-growth-the-link-between-inclusive-insurance-markets-growth-and-poverty-reduction
Chen, P-F., Lee, C-C., & Lee, C-F. (2012). How does the development of the life insurance market affect economic growth? Some international evidence. Journal International Development, 24(7), 865–893. Doi: https://doi.org/10.1002/jid.1765
Dercon, S. & Christiaensen, L. (2007). Consumption Risk, Technology Adoption and Poverty Traps: Evidence from Ethiopia (Working paper No. 4257). Recuperado de http://documentos.bancomundial.org/curated/es/703071468256451288/Consumption-risk-technology-adoption-and-poverty-traps-evidence-from-Ethiopia
Feyen, E., Lester, R., & Rocha, R. (2011). What Drives the Development of the Insurance Sector? An Empirical Analysis Based on a Panel of Developed and Developing Countries. Policy Research (Working Paper No. 5572). Recuperado de https://openknowledge.worldbank.org/handle/10986/3339
Focarelli, D. (2017). Why insurance regulation is crucial for long-term investment and economic growth (School of European Political Economy, Working Paper No.1). Recuperado de http://sep.luiss.it/research/working-papers/2017/01/13/d-focarelli-why-insurance-regulation-crucial-long-term-investment
Freedom House (2016). Database, Freedom in the World. Washington, DC. Recuperado de https://freedomhouse.org/report/freedom-world-2016/table-scores
Haiss, P. & Sumegi, K. (2008). The Relationship of Insurance and Economic Growth: a Theoretical and Empirical Analysis. Empirica 35(4), 405-431. Doi: https://doi.org/10.1007/s10663-008-9075-2
Herce, J., Delgado, D., Azpeitia, F., Blasco, I., & Hernández, P. (2013). El seguro en la sociedad y economía españolas, balance socieconómico de una industria necesaria. Fundación Mapfre. Madrid, España. Recuperado de https://www.fundacionmapfre.org/documentacion/publico/es/catalogo_imagenes/grupo.cmd?path=1075909
Insurance Europe. (2016). European insurance industry database. Bruselas, Bélgica. Recuperado de https://insuranceeurope.eu/european-insurance-industry-database
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2010). The Worldwide Governance Indicators. World Bank: Washington, DC. Recuperado de http://info.worldbank.org/governance/wgi/#home
La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (1999). The Quality of Government. Journal of Law, Economics, and Organization, 15(1), 222-279. Doi: http://dx.doi.org/10.2139/ssrn.183908
Lee, C-C., Chang, C-H., Arouri, M., & Lee, C-C. (2016). Economic growth and insurance development: The role of institutional environments. Economic Modelling, 59, 361-369. Doi: https://doi.org/10.1016/j.econmod.2016.08.010
Levine, R., Loayza, N., & Beck, T. (2000). Financial Intermediation and Growth: Causality and Causes. Journal of Monetary Economics, 46(1), 31-77. Recuperado de https://doi.org/10.1016/S0304-3932(00)00017-9
Organization for Economic Cooperation and Development. (2016). Insurance companies and employees. Doi: http://dx.doi.org/10.1787/21c971c6-en
Outreville, F. (1998). Theory and Practice of Insurance. Boston: Kluwer Academic Publishers. Doi: http://dx.doi.org/10.1007/978-1-4615-6187-3
Outreville, F. (2013). The Relationship between Insurance and Economic Development: 85 Empirical Papers for a Review of the Literature. Risk Management and Insurance Review, 16(1), 71–122. Doi: http://dx.doi.org/%2010.1111/j.1540-6296.2012.01219.x
Roodman, D. (2009). How to Do xtabond2: An Introduction to "Difference" and "System" GMM in Stata. Stata Journal 9(1), 86-136. Recuperado de https://econpapers.repec.org/article/tsjstataj/v_3a9_3ay_3a2009_3ai_3a1_3ap_3a86-136.htm
Swiss Reinsurance Company. (2016) World Insurance in 2015: Growing Premiums and Stronger Balance Sheets. Zúrich, Suiza: Suministrado por Swiss Re.
World Development Indicators. (2016).World Development Indicators Featuring the Sustainable Development Goals. Recuperado de http://databank.worldbank.org/data/download/site-content/wdi-2016-highlights-featuring-sdgs-booklet.pdf
This publication is subject to the Creative Commons License; therefore, its attributions and restrictions must be respected.
Authors publishing in this Journal accept the following conditions:
- Authors retain copyright ownership and give the Journal first publication right of the paper, which is registered with the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. This license allows third parties to use the published work provided it is sourced as firstly published in this Journal.
- Authors may enter into other independent and additional contractual agreements for the non-exclusive distribution of the article published in this Journal (e.g., to be included in an institutional repository or published in a book) provided it is clearly stated that the work was published in this Journal for the first time.
- Authors are allowed and recommended to publish their work on the Internet (for example, on institutional or personal pages) before and during the review and publication process, as it can lead to productive exchanges and a greater and faster dissemination of work published.
The Economía & Sociedad Journal, published by Universidad Nacional, is licensed under a Creative Commons Reconocimiento-NoComercial-CompartirIgual 4.0 Internacional License. Based on http://www.revistas.una.ac.cr/index.php/economia.