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The relationship between insurance and economic growth: evidence from the European Union countries

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  • Valentina Peleckienė
  • Kęstutis Peleckis
  • Gitana Dudzevičiūtė
  • Kęstutis K. Peleckis

Abstract

This paper has examined the relationships between insurance and economic growth across the European Union countries which belong to the European Insurance Federation. Using annual data over the period of 2004–2015, the authors have done this by applying descriptive statistics analysis and econometric methods as well. This research has contributed to understanding the importance of the insurance–growth nexus and combined different approaches prevailing in the recent scientific literature. The research has led to the following broad conclusions: (1) descriptive statistics analysis has shown that the insurance sector development is higher in economically rich countries, such as the UK, Denmark, Finland, Ireland, France and The Netherlands; (2) a positive statistically significant relationship between insurance penetration and economic growth has been detected in Luxembourg, Denmark, The Netherlands and Finland. Besides, a negative statistically significant relationship has been identified in Austria, Belgium, Malta, Estonia and Slovakia; (3) Granger test has shown unidirectional causality running from GDP to insurance in Luxembourg and Finland; and unidirectional causality from insurance to GDP in The Netherlands, Malta and Estonia. The case of Austria has shown bidirectional causality between the variables. The analysis has presented the absence of causality between insurance and economic growth in Slovakia.

Suggested Citation

  • Valentina Peleckienė & Kęstutis Peleckis & Gitana Dudzevičiūtė & Kęstutis K. Peleckis, 2019. "The relationship between insurance and economic growth: evidence from the European Union countries," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 32(1), pages 1138-1151, January.
    • Handle: RePEc:taf:reroxx:v:32:y:2019:i:1:p:1138-1151
    DOI: 10.1080/1331677X.2019.1588765
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    Cited by:

    1. Rudra P. Pradhan & Sahar Bahmani & Rebecca Abraham & John H. Hall, 2023. "Insurance Market and Economic Growth in an Information-Driven Economy: Evidence from a Panel of High- and Middle-Income Countries?," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 30(3), pages 587-620, September.
    2. Martin Hodula & Jan Janků & Martin Časta & Adam Kučera, 2023. "On the macrofinancial determinants of life and non-life insurance premiums," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 48(4), pages 760-798, October.

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