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The relationship between insurance and banking sectors in Sub-Saharan African: Does globalization matter?

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  • Relwendé Sawadogo

    (University of Joseph Ki-Zerbo)

Abstract

This paper analyses the link between bank credit to private sector and insurance (life, non-life, and total insurance) activity and the role of globalization level in this relationship. To do this, we estimated with PMG estimator on a sample of 20 countries of Sub-Saharan African (SSA) over the period from 1990 to 2017. The empirical results indicate the real banking credit density is positively associated with the development of life insurance and total insurance activity, even after controlling for the effect of other determinants of insurance (life and non-life) density. Furthermore, the level of globalization is found to have a favourable effect on the extent to which banking credit influences the development of insurance activity, suggesting that the globalization is an opportunity to accelerate the development of insurance sector in SSA.

Suggested Citation

  • Relwendé Sawadogo, 2021. "The relationship between insurance and banking sectors in Sub-Saharan African: Does globalization matter?," Economic Change and Restructuring, Springer, vol. 54(1), pages 101-119, February.
    • Handle: RePEc:kap:ecopln:v:54:y:2021:i:1:d:10.1007_s10644-020-09277-6
    DOI: 10.1007/s10644-020-09277-6
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    More about this item

    Keywords

    Insurance activity; Banking credit; Globalization; Pooled mean group estimator; Sub-Saharan African;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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