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Examining the Causal Relationship between Globalization and Insurance Activities in Large Emerging Market (LEM) Economies: Evidence from Bootstrap Panel Granger Causality

Author

Listed:
  • Godwin Olasehinde-Williams

    (Department of Economics, Eastern Mediterranean University)

  • Mehmet Balcilar

    (Department of Economics, Eastern Mediterranean University)

Abstract

This study applies bootstrap panel Granger causality test of to examine the causal relationship between globalization and insurance market activities in large emerging market economies. Economic, social, political and overall globalization indices are considered separately, and 3 alternative measures of globalization (hybrid, de facto and de jure) are also used in each case for our estimations. The empirical results confirm the following; first, empirical outcomes are sensitive to the choice of globalization measure used. Second, cross-sectional dependence and cross-country heterogeneity exist among large emerging market economies. Third, causality varies across large emerging economies with different conditions, and social globalization has the most widespread effect on insurance market activities.

Suggested Citation

  • Godwin Olasehinde-Williams & Mehmet Balcilar, 2018. "Examining the Causal Relationship between Globalization and Insurance Activities in Large Emerging Market (LEM) Economies: Evidence from Bootstrap Panel Granger Causality," Working Papers 15-40, Eastern Mediterranean University, Department of Economics.
    • Handle: RePEc:emu:wpaper:15-40.pdf
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    References listed on IDEAS

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    3. Cagay Coskuner & Godwin Oluseye Olasehinde-Williams, 2017. "Estimating the Effect of Common Currency on Trade in West African Monetary Zones: A Dynamic Panel-GMM Analysis," Springer Proceedings in Business and Economics, in: NESRIN ÖZATAÇ & Korhan K. GÖKMENOGLU (ed.), New Challenges in Banking and Finance, pages 105-114, Springer.
    4. Axel Dreher, 2006. "Does globalization affect growth? Evidence from a new index of globalization," Applied Economics, Taylor & Francis Journals, vol. 38(10), pages 1091-1110.
    5. Chen, Sen-Sung & Cheng, Shu-Ching & Pan, Guochen & Wu, Tsung-Pao, 2013. "The relationship between globalization and insurance activities: A panel data analysis," Japan and the World Economy, Elsevier, vol. 28(C), pages 151-157.
    6. Emirmahmutoglu, Furkan & Kose, Nezir, 2011. "Testing for Granger causality in heterogeneous mixed panels," Economic Modelling, Elsevier, vol. 28(3), pages 870-876, May.
    7. J. David Cummins & Bertrand Venard, 2008. "Insurance Market Dynamics: Between Global Developments and Local Contingencies," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 11(2), pages 295-326, September.
    8. Chang, Tsangyao & Cheng, Shu-Ching & Pan, Guochen & Wu, Tsung-pao, 2013. "Does globalization affect the insurance markets? Bootstrap panel Granger causality test," Economic Modelling, Elsevier, vol. 33(C), pages 254-260.
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    Cited by:

    1. Lei Peng & Zhaotong Lian, 2021. "Diversification and efficiency of life insurers in China and India," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(4), pages 710-730, October.

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    More about this item

    Keywords

    Globalization; Insurance Markets; Bootstrap panel Granger causality; Large Emerging Market Economies;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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