The Impact of Regulatory Quality on the Nexus between Life Insurance Development and Economic Growth: Evidence from European Developing Countries

Gengnan Chiang and Chin-Chi Liu

Bulletin of Applied Economics, 2020, vol. 7, issue 2, 141-152

Abstract: The purpose of this study is to explore whether the regulatory quality influences the relation between life insurance development and economic growth by applying a nonlinear panel smooth transition regression (PSTR) model. Using the data from Worldwide Governance Indicators (WGI) to assess the soundness of regulatory quality, this paper finds that the relationship between life insurance development and economic growth is significantly positive in the countries with relatively better regulatory quality. Our findings not only indicate that sound regulatory quality could encourage the growth effect of life insurance sectors but also have far-reaching practical implications for other economies to realize regulatory quality should matter for the development of the economic growth.

Keywords: Regulatory quality; Life insurance development; Economic growth; Nonlinear panel smooth transition regression (PSTR) model. (search for similar items in EconPapers)
JEL-codes: E44 G22 O11 O47 P34 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:rmk:rmkbae:v:7:y:2020:i:2:p:141-152

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