Insurance activity and economic performance: Fresh evidence from asymmetric panel causality tests

Abdulnasser Hatemi-J, Chi Chuan Lee, Chien Chiang Lee, Rangan Gupta

    Research output: Contribution to journalArticlepeer-review

    6 Citations (Scopus)

    Abstract

    Insurance plays a fundamental role in any modern economy, but the literature has not accounted for the potential asymmetric causal impacts from the dynamic interaction between the insurance market and economic performance. This paper aims to fill this gap by studying the causal relationship between several measures of insurance per capita and real GDP per capita in the G7 countries over the period 1980–2014 via asymmetric panel causality tests. Our results show that insurance market activity and economic performance exhibit bidirectional causalities, but their direction, intensity and significance are different due to distinct market situations. In general, insurance activity plays a passive role in economic performance, while economic performance has a significant role in insurance activity. These findings offer several useful insights for policy makers and researchers.

    Original languageEnglish
    Pages (from-to)221-240
    Number of pages20
    JournalInternational Finance
    Volume22
    Issue number2
    DOIs
    Publication statusPublished - 2019

    ASJC Scopus subject areas

    • Geography, Planning and Development
    • Development
    • Finance

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