Impact Of Insurance On Economic Growth: The Case Of Republic Of Macedonia
Abstract
The purpose of this paper is to examine the impact of insurance and economic growth, with empirical analysis for the Republic of Macedonia. We apply multiple regression and control for other relevant determinants of economic growth. The analysis used data for the period 1995 - 2010. In order to solve the model in the analysis will use the technique of least squares, followed by analysis of variability in order to identify the effects of each variable. Insurance development is measured by insurance penetration (insurance premiums in percentage of GDP). We used three different insurance variables - life insurance, non-life insurance and total insurance penetration. According to our findings, insurance sector development positively and significantly affects economic growth. The results are confirmed in terms of non-life insurance, and, total insurance, while the results show that life insurance negatively affect economic growth.References
Adams, M, Andersson, J, Andersson L-F, and Lindmark, M. Commercial banking, insurance and economic growth in Sweden between 1830 and 1998, Accounting, Business & Financial History, Vol. 19, No. 1, pp. 21-38, 2009.
Ahlin, C, and Pang, J. Are financial development and corruption control substitutes in promoting growth?. Journal of Development Economics, Vol. 86, No. 2, pp. 414-433, 2008
Arena, M. Does Insurance Market Activity Promote Economic Growth? A Cross-Country Study for Industrialized and Developing Countries, Journal of Risk and Insurance, Vol. 75, No. 4, pp. 921-946, 2008.
Beenstock, M, Dickinson, G, and Khajuria, S.The Determination of Life Premiums: An International Cross-Section analysis 1970-1981, Insurance, Mathematics and Economics, Vol. 5, No. 4, pp. 261-270, 1986
Beck, T, and Levine, R. Stock markets, banks, and growth: Panel evidence, Journal of Banking & Finance, Vol. 28, No. 3, pp. 423-442, 2004
Berthelemy, J. C., and Varoudakis, A. Economic Growth, Convergence Clubs, and the Role of Financial Development. Oxford Economic Papers, New Series, Vol. 48, No. 2, pp. 300-328,1996.
Dawson, P.J. Financial development and economic growth in developing countries. Progress in Development Studie, 2008.
Dorfman, M. S. Introduction to Risk Management and Insurance, Upper Saddle River, NJ: Pearson Education, Inc, 2008.
Gertler, M. L. Financial Structure and Aggregate Economic Activity: An Overview, Journal of Money, Credit and Banking, Vol. 20, No. 3, pp. 559-588,1998.
Grace, M. F., Rebello, M. J. Financing and the Demand for Corporate Insurance, Geneva Papers on Risk and Insurance 18, pp. 147 – 172, 1993.
Haiss, P, and Sümegi, K. The relationship between insurance and economic growth in Europe: a theoretical and empirical analysis, Empirica, 35 (4), pp. 405-431, 2008.
Hussels, S, Ward, D. and Zurbruegg, R. (2000) Stimulating the Demand for Insurance, Risk Management and Insurance Review, Vol. 8, No. 2, pp. 257-278.
Im, K.S., Pesaran, M.H., and Shin, Y. Testing for Unit Roots in heterogeneous Panels. Journal of Economics. 115: pp. 53-74, 2003
King, R, and Levine, R. Finance and Growth. Schumpeter Might Be Right. Policy Research Working papers, 1083, 1993
Kugler, M, and Ofoghi, R. Does Insurance Promote Economic Growth? Evidence from the UK In: Money Macro and Finance Research Group/ Money Macro and Finance (MMF) Research Group Conference 2005, 1-3 September, University of Crete, Rethymno, Greece, 2005.
Levine, R. Financial Development and Economic Growth: Views and Agenda. Journal of Economic Literature, Vol. XXXV(6), pp. 688-726, 1997.
Levine, R. The Legal Environment, Banks, and Long-Run Economic Growth. Journal of Money, Credit and Banking, Vol. 30, No. 3-2, pp.596-613, 1998.
Levine, R. Financial Development and Growth: Where Do We Stand? Estudios de Economia, Vol. 26, No. 2, pp. 113-136, 1999.
Levine, R, and Zervos, S. Stock Markets, Banks and Economic Growth. Policy research working paper, 1690, 1996.
Levine, R, and Zervos, S. Stock Markets, Banks, and Economic Growth, American Economic Review, Vol. 88, No. 3, pp. 537-558, 1998.
Levine, R, Loayza, N, and Beck, T. Financial Intermediation and Growth: Causality and Causes. Journal of Monetary Economics, 46(1), pp. 31-77, 2000.
Marin, D. Is the Export-Led Growth Hypothesis Valid for Industrialized Countries?, The Review of Economics and Statistics, Vol. 74, No.4, pp. 678-688, 1992.
Merton, R.C., and Z. Bodie A Conceptual Framework for Analyzing the Financial Environment”, in eds. D. B. Crane et. al., The global financial system, a functional perspective, 1995.
Pagano, M. Financial markets and growth: An overview, European Economic Review, Vol. 37, No. 2-3, pp. 613-622, 1993
Skipper, H. D. and Kwon, W. J. Risk Management and Insurance: Perspectives in a Global Economy, Oxford: Blackwell Publishing, Ltd, 2007.
USAID. Аssessment on How Strengthening the Insurance Industry in Developing Countries Contributes to Economic Growth, United States Agency for International Development, 2006.
Valverde, S.C., Lopez del Paso, R, and Fernandez R.R. Banks, Financial Inovations and Regional Growth, 2004.
Vohra, R. Export and economic growth: Further time series evidence from less-developed countries, International Advances in Economic Research, Vol. 7, No. 3, pp. 345-350, 2011.
Ward, D and Zurbruegg, R. Does Insurance Promote Economic Growth? Evidence from OECD Countries, The Journal of Risk and Insurance, 67 (4), pp. 489-506, 2000.
Webb, I, Grace, M.F. and Skipper, H. The effect of banking and insurance on the growth of capital and output, Georgia State University working paper, 2002.
White, H. A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity, Econometrica, Vol. 48, No. 4, pp. 817-838, 1980
www.aso.com.mk
Zou, H., Adams, M. B. The Corporate Purchase of Property Insurance: Chinese Evidence, Journal of Financial Intermediation 15(2), pp.156-196, 2006.
Copyright information
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License (Creative Commons Attribution License 3.0 - CC BY 3.0) that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
info@cbuni.cz, www.cbuni.cz, ojs.journals.cz
