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Does globalization affect the insurance markets? Bootstrap panel Granger causality test

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  • Chang, Tsangyao
  • Cheng, Shu-Ching
  • Pan, Guochen
  • Wu, Tsung-pao

Abstract

This study applies the bootstrap panel Granger causality test to identify whether globalization promotes insurance activity using data from Sigma reports of the Swiss Reinsurance Company of 8 Eastern Asian countries over the period of 1979–2008. Empirically, results for one-way Granger causality show the influence of insurance activity on globalization only in Japan. However, there is strong interaction causality between globalization and insurance activity in India, South Korea, and Thailand. In our research, the results show that the causality between globalization and insurance activity varies across countries under different conditions. The findings of this study could provide important policy implications for the 8 Eastern Asian countries under study, namely India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, and Thailand.

Suggested Citation

  • Chang, Tsangyao & Cheng, Shu-Ching & Pan, Guochen & Wu, Tsung-pao, 2013. "Does globalization affect the insurance markets? Bootstrap panel Granger causality test," Economic Modelling, Elsevier, vol. 33(C), pages 254-260.
    • Handle: RePEc:eee:ecmode:v:33:y:2013:i:c:p:254-260
    DOI: 10.1016/j.econmod.2013.04.008
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    Cited by:

    1. Pradhan, Rudra P. & Arvin, Mak B. & Norman, Neville R., 2015. "Insurance development and the finance-growth nexus: Evidence from 34 OECD countries," Journal of Multinational Financial Management, Elsevier, vol. 31(C), pages 1-22.
    2. Ruan, Qingsong & Zhang, Manqian & Lv, Dayong & Yang, Haiquan, 2018. "SAD and stock returns revisited: Nonlinear analysis based on MF-DCCA and Granger test," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 509(C), pages 1009-1022.
    3. Balcilar, Mehmet & Gupta, Rangan & Lee, Chien-Chiang & Olasehinde-Williams, Godwin, 2018. "The synergistic effect of insurance and banking sector activities on economic growth in Africa," Economic Systems, Elsevier, vol. 42(4), pages 637-648.
    4. Cao, Guangxi & Han, Yan & Li, Qingchen & Xu, Wei, 2017. "Asymmetric MF-DCCA method based on risk conduction and its application in the Chinese and foreign stock markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 468(C), pages 119-130.
    5. Wanat, Stanisław & Papież, Monika & Śmiech, Sławomir, 2016. "Insurance Market Development and Economic Growth in Transition Countries: Some new evidence based on bootstrap panel Granger causality test," MPRA Paper 69051, University Library of Munich, Germany.
    6. Lee, Chien-Chiang & Chiu, Yi-Bin, 2016. "Globalization and insurance activity: Evidence on the industrial and emerging countries," The North American Journal of Economics and Finance, Elsevier, vol. 36(C), pages 328-349.
    7. Pradhan, Rudra P. & Arvin, B. Mak & Norman, Neville R. & Nair, Mahendhiran & Hall, John H., 2016. "Insurance penetration and economic growth nexus: Cross-country evidence from ASEAN," Research in International Business and Finance, Elsevier, vol. 36(C), pages 447-458.
    8. Rudra P. Pradhan & Saurav Dash & Rana Pratap Maradana & Manju Jayakumar & Kunal Gaurav, 2017. "Insurance market density and economic growth in Eurozone countries: the granger causality approach," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 3(1), pages 1-24, December.
    9. Godwin Olasehinde-Williams & Mehmet Balcilar, 2018. "Examining the Causal Relationship between Globalization and Insurance Activities in Large Emerging Market (LEM) Economies: Evidence from Bootstrap Panel Granger Causality," Working Papers 15-40, Eastern Mediterranean University, Department of Economics.
    10. Pradhan, Rudra P. & Arvin, Mak B. & Bahmani, Sahar & Hall, John H. & Norman, Neville R., 2017. "Finance and growth: Evidence from the ARF countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 66(C), pages 136-148.
    11. Rudra P. Pradhan & Mak B. Arvin & Sahar Bahmani & Sara E. Bennett & John H. Hall, 2017. "Insurance–growth nexus and macroeconomic determinants: evidence from middle-income countries," Empirical Economics, Springer, vol. 52(4), pages 1337-1366, June.
    12. Rudra P. Pradhan, Mak B. Arvin, John H. Hall and Neville R. Norman, 2017. "Insurance Market Development and Macroeconomic Interactions in Twenty-Six Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 42(4), pages 23-57, December.
    13. Olasehinde-Williams, Godwin & Balcilar, Mehmet, 2020. "Examining the Effect of Globalization on Insurance Activities in Large Emerging Market Economies," Research in International Business and Finance, Elsevier, vol. 53(C).

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    More about this item

    Keywords

    Globalization; Insurance markets; Bootstrap panel Granger causality test; Eastern Asia; Cross dependence;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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