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Does insurance market impact the economic growth? Evidence from Albania

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  • Gentiana Sharku, Evis Kumi

Abstract

Insurance plays a significant role in the economy development all over the world, being an important source of capital accumulation and investment. This paper studies the long run dynamic relations between economic growth and the insurance market in Albania. Using secondary quarterly data from 2005 to 2018, we have taken into consideration three main indicators of the insurance market: (i) life and non-life insurance volume; (ii) life and non-life insurance density and (iii) life and non-life insurance penetration index. The data analysis is carried through Johansen’s vector error-correction model. The findings of the study revealed no long run relation between economic growth and insurance market, when the employed indicators are the premium volume and the penetration index. On the other hand, when the insurance market is measured by the density index, we found a long run negative relation between growth and life insurance activity and a long run positive relationship between growth and non-life insurance activity.

Suggested Citation

  • Gentiana Sharku, Evis Kumi, 2021. "Does insurance market impact the economic growth? Evidence from Albania," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 18(2), pages 267-289, December.
    • Handle: RePEc:liu:liucej:v:18:y:2021:i:2:p:267-289
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    More about this item

    Keywords

    Insurance market; Economic growth; Albania;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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