Regional differences in development of life insurance markets in China

Guochen Pan, Hsu-Ling Chang and Chi-Wei Su

Emerging Markets Review, 2012, vol. 13, issue 4, 548-558

Abstract: This study employs flexible Fourier unit root test proposed by Enders and Lee (2012) to examine the regional differences in life insurance market development in China. We find that property of stationarity for life insurance market development varies across different regions. Specifically, stationarity prevails in provinces with middle and low income, indicating characteristics of convergence and the possibilities to forecast future movements of life insurance activities based on past behavior, while 7 out of 10 provinces in high-income group show non-stationarity, suggesting unbound development in these regions and weak predictability. Justifications for the test results are presented from aspects of development of financial market, market structure of life insurance and business strategy of life insurance companies, and implications for policy-making are also given.

Keywords: Life insurance market; Breaks; Flexible Fourier unit root test (search for similar items in EconPapers)
JEL-codes: C23 R11 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:13:y:2012:i:4:p:548-558

DOI: 10.1016/j.ememar.2012.09.001

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