Insurance and Economic Growth: A Cross Country Examination

45 Pages Posted: 23 Jul 2010 Last revised: 21 Sep 2010

See all articles by Yen Nguyen

Yen Nguyen

St. Francis Xavier University

Katherine Avram

Monash University

Michael T. Skully

Monash University - Department of Banking and Finance; Financial Research Network (FIRN)

Date Written: August 23, 2010

Abstract

While insurance plays an important role in the financial sector, it is often ignored in the financial development-economic growth literature. This paper examines the relationship between insurance and economic growth via a global cross-country study over 1980 to 2006, using both cross-sectional estimations and dynamic panel data techniques. We find a significant positive relationship between economic growth and overall insurance, as well as more specifically for life and non-life insurance. We find weak evidence that a country’s stage of development may influence this relationship; but strong evidence that the quality of a country’s legal system and protection of property rights is positively related to insurance growth. The study adds to the existing literature in respect to the legal factors as well as offers further support for the role of insurance in the finance-growth literature.

Keywords: Insurance, Economic Growth, Life Insurance

JEL Classification: G22

Suggested Citation

Nguyen, Yen and Avram, Katherine and Skully, Michael T., Insurance and Economic Growth: A Cross Country Examination (August 23, 2010). Australian Centre for Financial Studies - Finsia Banking and Finance Conference 2010, Available at SSRN: https://ssrn.com/abstract=1646757 or http://dx.doi.org/10.2139/ssrn.1646757

Yen Nguyen

St. Francis Xavier University ( email )

Antigonish, Nova Scotia
Canada

Katherine Avram

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

Michael T. Skully (Contact Author)

Monash University - Department of Banking and Finance ( email )

900 Dandenong Road
Caulfield East, Victoria 3145
Australia
+61 3 9903 2407 (Phone)
+61 3 9903 1443 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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