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Regional differences in development of life insurance markets in China

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  • Pan, Guochen
  • Chang, Hsu-Ling
  • Su, Chi-Wei
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    Abstract

    This study employs flexible Fourier unit root test proposed by Enders and Lee (2012) to examine the regional differences in life insurance market development in China. We find that property of stationarity for life insurance market development varies across different regions. Specifically, stationarity prevails in provinces with middle and low income, indicating characteristics of convergence and the possibilities to forecast future movements of life insurance activities based on past behavior, while 7 out of 10 provinces in high-income group show non-stationarity, suggesting unbound development in these regions and weak predictability. Justifications for the test results are presented from aspects of development of financial market, market structure of life insurance and business strategy of life insurance companies, and implications for policy-making are also given.

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    Bibliographic Info

    Article provided by Elsevier in its journal Emerging Markets Review.

    Volume (Year): 13 (2012)
    Issue (Month): 4 ()
    Pages: 548-558

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    Handle: RePEc:eee:ememar:v:13:y:2012:i:4:p:548-558

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    Web page: http://www.elsevier.com/locate/inca/620356

    Related research

    Keywords: Life insurance market; Breaks; Flexible Fourier unit root test;

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    References

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