The moderating role of terrorism on the insurance–growth nexus: empirical evidence from the 14 MENA countries

Purpose - This paper empirically examines the impact of terrorism on the insurance–growth relationship in the context of Middle East and North Africa (MENA) region, thereby attempting to address the unexplored area in the relevant literature. Design/methodology/approach - The study considered MENA as it has been one of the terribly affected zones in the world during the study period. Panel data for the period (2002–2017) are sourced from reliable sources for 14 member economies of the MENA region. Findings - After employing the suitable econometric procedures on the panel data, the results indicate that terrorism appears to have detrimental impact on the observed positive relationship between insurance and economic growth. In addition, trade openness seems to be the main driving force behind economic growth of the selected MENA countries. Surprisingly, the study suggests a negative association between the growth of physical capital and economic growth. Human capital has played a positive but insignificant role in improving economic growth as it is insignificant in majority of the specifications. The growth of labor force has although positively but insignificantly influenced economic growth. Finally, the results demonstrate that government expenditures and high inflation are harmful for growth. Originality/value - The study investigated the impact of terrorism on the insurance–growth relationship for the first time, and hence policymakers of the MENA region are expected to be benefited enormously from the findings of the study.