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Insurance penetration and economic growth nexus: Cross-country evidence from ASEAN

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  • Pradhan, Rudra P.
  • Arvin, B. Mak
  • Norman, Neville R.
  • Nair, Mahendhiran
  • Hall, John H.

Abstract

This paper investigates whether there are Granger causal relationships between insurance market penetration, broad money, stock-market capitalization, and economic growth, using panel data for the Association of South East Asian Nations (ASEAN) Regional Forum (ARF) countries for the 1988–2012 period. Using a multivariate framework, we show that all the variables are cointegrated and reveal a network of causal connections, including short-run bidirectional causality between insurance market penetration and economic growth. Recommendations based on this study include establishing a sound regulatory framework for a country's insurance industry, and introducing professional education and certification of insurance personnel to ensure adherence to global best practices and standards. Moreover, opening up a country's domestic insurance market to larger foreign players can ensure a wider choice of cost-effective, quality insurance.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:riibaf:v:36:y:2016:i:c:p:447-458
    DOI: 10.1016/j.ribaf.2015.09.036
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. repec:eee:riibaf:v:47:y:2019:i:c:p:410-427 is not listed on IDEAS
    3. repec:spr:empeco:v:52:y:2017:i:4:d:10.1007_s00181-016-1111-7 is not listed on IDEAS
    4. repec:eee:riibaf:v:43:y:2018:i:c:p:1-14 is not listed on IDEAS

    More about this item

    Keywords

    Insurance market penetration; Broad money; Stock market capitalization; Economic growth; ASEAN; Granger causality; ARF countries;

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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