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Evaluating the Insurance Development-Economic Growth Nexus in Albania

Author

Listed:
  • Ermira Kalaj

    () (University “Luigj Gurakuqi”)

  • Flora Merko

    () (University “Aleksander Moisiu”)

  • Alma Zisi

    () (University “Aleksander Moisiu”)

Abstract

This paper examines the impact of insurance market on economic development in Albania. We use macroeconomic data for the period 2006-2015 in order to answer a research question about the nexus between the insurance market development and economic growth. In our paper the dependent variable, GDP per capita, is analysed in relation to the following set of control variables: written gross premiums on life and non life insurance, government consumption, export and import of goods and services, human capital, and savings. Insurance premiums are used as a standard measure of insurance market development and in our research we disaggregate data for life and non-life insurance. The empirical results of our analysis are partially consistent with previous studies focused on developing countries. The correlation seems to be stronger between GDP per capita and non-life insurance, which is predominant in the Albanian insurance market. The research findings are important for the Albanian policy makers in order to foster economic growth, which is currently constrained by limited capital stock and excessive foreign debt burden.

Suggested Citation

  • Ermira Kalaj & Flora Merko & Alma Zisi, 2017. "Evaluating the Insurance Development-Economic Growth Nexus in Albania," Eastern European Business and Economics Journal, Eastern European Business and Economics Studies Centre, vol. 3(4), pages 350-359.
  • Handle: RePEc:eeb:articl:v:3:y:2017:n:4:p:350-359
    as

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    References listed on IDEAS

    as
    1. Ermira Kalaj & Mithat Mema, 2015. "Investigating the Twin Deficits in Albania," European Journal of Social Sciences Education and Research Articles, European Center for Science Education and Research, vol. 2, January-A.
    2. Marco Arena, 2008. "Does Insurance Market Activity Promote Economic Growth? A Cross‐Country Study for Industrialized and Developing Countries," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 75(4), pages 921-946, December.
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