Relationship between insurance market development and economic growth in Vietnam
Main Article Content
Abstract
The research was conducted to determine the relationship between insurance market development and economic growth in Vietnam during 1996 - 2017. By using the Autoregression distribution lag model - ARDL, the results emphasize a positive impact of insurance market development on economic growth in both short and long term. This result supports the Supply-leading hypothesis (SLH). Besides, the magnitude and speed of the impact of the development of the life insurance market and the non-life insurance market are different. Specifically, the non-life insurance market has more impact on economic growth, however, the change in the life insurance market has an impact on economic growth faster than non-life insurance in the long term.
Article Details
Keywords
Insurance market development, Economic growth
References
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Bootstrap panel Granger causality test. Economic Modelling, 33, 254-260.
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Economics and Finance, 8, 226-235. Liu, G. C., & Lee, C. C. (2014). Insurance activities and banking credit causal nexus: evidence from China. Applied Economics Letters, 21(9), 626-630.
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Han, L., Li, D., Moshirian, F., Tian, Y., 2010. Insurance development and economic growth. Geneva Papers 35, 183– 199, http://dx.doi.org/10.1057/ gpp.2010.4
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Lee, C. C, Lee, C. C. and Chiu, Y. B. (2013). The Link between Life Insurance Activities and Economic Growth: Some New Evidence. Journal of International Money and Finance, Vol. 32, No. 3, pp. 405- 427.
Lee, C. C. (2011). Does Insurance Matter for Growth: Empirical Evidence from OECD Countries. The B. E. Journal of Macroeconomics, Vol. 11, No. 1, pp. 1-26.
Lee, C. C. and Chiu, Y.B. (2012). The Impact of Real Income on Insurance Penetration: Evidence from Panel Data. International Review of Economics and Finance, Vol. 21, No. 1, pp. 246-260.
Lee, S. J., Kwon, S. I., Chung, S.Y. (2010). Determinants of Household Demand for Insurance: The Case of Korea. Geneva Papers on Risk and Insurance: Issues and Practice, Vol. 35, No. 1, pp. 82-91.
Liu, G. C. and Lee, C. C. (2014). Insurance Activities and Banking Credit Causal Nexus: Evidence from China. Applied Economics Letters, Vol. 21, No. 9, pp. 626-630.
Pan, G., & Su, C. (2012, July). The relationship between insurance development and economic growth: a cross-region study for China. In China International Conference on Insurance and Risk Management.
Pesaran, M.H., Shin, Y., Smith, R.J., 2001. Bounds testing approaches to the analysis of level relationships. J. Appl.
Econ. 16, 289–326.
Pradhan, R.P., Arvin, M. B., Norman, N.R., 2015. Insurance development and the finance-growth nexus: Evidence from 34 OECD countries. Journal of Multinational Financial Management, 31 (1):1-22.
Ward, D. and Zurbruegg, R. (2000). Does Insurance Promote Economic Growth? Evidence from OECD Countries. Journal of Risk and Insurance, Vol. 67, No. 4, pp. 489-506.
Boon, T. K. (2005). Do Commercial banks, stock market and insurance market promote economic growth?
An analysis of the Singapore Economy. Nanyang Technological University.
Chang, T., Cheng, S. C., Pan, G., & Wu, T. P. (2013). Does globalization affect the insurance markets?
Bootstrap panel Granger causality test. Economic Modelling, 33, 254-260.
Cristea, M., Marcu, N., & Cârstina, S. (2014). The relationship between insurance and economic growth in Romania compared to the main results in Europe–a theoretical and empirical analysis. Procedia.
DꞌArcy, S., Gorvett, R., 2004. The use of dynamic financial analysis to determine whether an optimal growth rate exists for a property-liability insurer. Journal of Risk and Insurance, 71 (4): 583- 616.
Dickey, D. A., & Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American statistical association, 74(366a), 427-431.
Economics and Finance, 8, 226-235. Liu, G. C., & Lee, C. C. (2014). Insurance activities and banking credit causal nexus: evidence from China. Applied Economics Letters, 21(9), 626-630.
Esho, N., Kirievsky, A., Ward, D., & Zurbruegg, R. (2004). Law and the determinants of property‐casualty insurance. Journal of risk and Insurance, 71(2), 265-283.
Granger, C. W. (1988). Some recent development in a concept of causality. Journal of econometrics, 39(1-
2), 199-211.
Gujarati, D., 1995. Basic Econometrics. Mcgraw-Hill, New York.
Guochen, P., Wei, S.C., 2012. The relationship between insurance development and economic growth: A cross- region study for China. China International Conference on Insurance and Risk Management, July 18-21,2012, Qingdao, China.
Han, L., Li, D., Moshirian, F., Tian, Y., 2010. Insurance development and economic growth. Geneva Papers 35, 183– 199, http://dx.doi.org/10.1057/ gpp.2010.4
Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of economic dynamics and control, 12(2-3), 231-254.
Kugler, M., & Ofoghi, R. (2005, September). Does insurance promote economic growth? Evidence from the UK. In Money Macro and Finance (MMF) Research Group Conference (Vol. 8).
Lee, C. C., Huang, W. L., & Yin, C. H. (2013). The dynamic interactions among the stock, bond and insurance markets. The North American Journal of Economics and Finance, 26, 28-52.
Lee, C. C, Lee, C. C. and Chiu, Y. B. (2013). The Link between Life Insurance Activities and Economic Growth: Some New Evidence. Journal of International Money and Finance, Vol. 32, No. 3, pp. 405- 427.
Lee, C. C. (2011). Does Insurance Matter for Growth: Empirical Evidence from OECD Countries. The B. E. Journal of Macroeconomics, Vol. 11, No. 1, pp. 1-26.
Lee, C. C. and Chiu, Y.B. (2012). The Impact of Real Income on Insurance Penetration: Evidence from Panel Data. International Review of Economics and Finance, Vol. 21, No. 1, pp. 246-260.
Lee, S. J., Kwon, S. I., Chung, S.Y. (2010). Determinants of Household Demand for Insurance: The Case of Korea. Geneva Papers on Risk and Insurance: Issues and Practice, Vol. 35, No. 1, pp. 82-91.
Liu, G. C. and Lee, C. C. (2014). Insurance Activities and Banking Credit Causal Nexus: Evidence from China. Applied Economics Letters, Vol. 21, No. 9, pp. 626-630.
Pan, G., & Su, C. (2012, July). The relationship between insurance development and economic growth: a cross-region study for China. In China International Conference on Insurance and Risk Management.
Pesaran, M.H., Shin, Y., Smith, R.J., 2001. Bounds testing approaches to the analysis of level relationships. J. Appl.
Econ. 16, 289–326.
Pradhan, R.P., Arvin, M. B., Norman, N.R., 2015. Insurance development and the finance-growth nexus: Evidence from 34 OECD countries. Journal of Multinational Financial Management, 31 (1):1-22.
Ward, D. and Zurbruegg, R. (2000). Does Insurance Promote Economic Growth? Evidence from OECD Countries. Journal of Risk and Insurance, Vol. 67, No. 4, pp. 489-506.
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