Insurance Stock Returns and Economic Growth

Chunyang Zhou, Chongfeng Wu, Donghui Li and Zhian Chen
Additional contact information
Chunyang Zhou: Room 502, Antai Building, Antai College of Economics & Management, Shanghai Jiao Tong University, No 535, Fahuazhen Road, Shanghai 200052, China. E-mails: cyzhou@sjtu.edu.cn; cfwu@sjtu.edu.cn
Chongfeng Wu: Room 502, Antai Building, Antai College of Economics & Management, Shanghai Jiao Tong University, No 535, Fahuazhen Road, Shanghai 200052, China. E-mails: cyzhou@sjtu.edu.cn; cfwu@sjtu.edu.cn
Donghui Li: School of Banking and Finance, Australian School of Business, University of New South Wales, Sydney, NSW 2052, Australia. E-mails: donghui@unsw.edu.au; zhianchen@unsw.edu.au
Zhian Chen: School of Banking and Finance, Australian School of Business, University of New South Wales, Sydney, NSW 2052, Australia. E-mails: donghui@unsw.edu.au; zhianchen@unsw.edu.au

The Geneva Papers on Risk and Insurance - Issues and Practice, 2012, vol. 37, issue 3, 405-428

Abstract: In this paper, we propose to use insurance stock returns as an indicator of insurance activities, and apply a dynamic panel technique to examine the link between the role of insurance and economic growth. Our empirical results show that after we control for the variations of market index returns, there is a significantly positive relationship between insurance stock returns and future economic growth. Furthermore, we also investigate how law environment and governance quality affect the link between the role of insurance and economic growth. The empirical results are consistent with our expectation that a well-defined law environment and governance quality facilitate the functioning of insurance companies, and strengthen the role of insurance in economic growth. We find generally that the effect of law and governance on the link between the role of insurance and economic growth is more significant in developed markets than in emerging markets.

Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.palgrave-journals.com/gpp/journal/v37/n3/pdf/gpp201222a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/gpp/journal/v37/n3/full/gpp201222a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:gpprii:v:37:y:2012:i:3:p:405-428

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/41288/PS2

Access Statistics for this article

The Geneva Papers on Risk and Insurance - Issues and Practice is currently edited by Christophe Courbage

More articles in The Geneva Papers on Risk and Insurance - Issues and Practice from Palgrave Macmillan, The Geneva Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().