Insurance penetration and economic growth nexus: Cross-country evidence from ASEAN

Rudra P. Pradhan, Mak Arvin, Neville R. Norman, Mahendhiran Nair and John H. Hall

Research in International Business and Finance, 2016, vol. 36, issue C, 447-458

Abstract: This paper investigates whether there are Granger causal relationships between insurance market penetration, broad money, stock-market capitalization, and economic growth, using panel data for the Association of South East Asian Nations (ASEAN) Regional Forum (ARF) countries for the 1988–2012 period. Using a multivariate framework, we show that all the variables are cointegrated and reveal a network of causal connections, including short-run bidirectional causality between insurance market penetration and economic growth. Recommendations based on this study include establishing a sound regulatory framework for a country's insurance industry, and introducing professional education and certification of insurance personnel to ensure adherence to global best practices and standards. Moreover, opening up a country's domestic insurance market to larger foreign players can ensure a wider choice of cost-effective, quality insurance.

Keywords: Insurance market penetration; Broad money; Stock market capitalization; Economic growth; ASEAN; Granger causality; ARF countries (search for similar items in EconPapers)
JEL-codes: L96 O32 O33 O43 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:36:y:2016:i:c:p:447-458

DOI: 10.1016/j.ribaf.2015.09.036

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