Abstract
This paper analyses the impact of insurance sector development on economic growth based on a sample that includes 14 Central and Eastern European (CEE) post-transition countries for a period of 19 years, from 1998 to 2016. Considering the presence of cross-section dependence and multiple structural breaks, recently developed panel econometric techniques were employed and led to the following conclusions: (1) life insurance has no significant effect on economic growth in both panel and individual countries, (2) non-life insurance positively affects economic growth in both panel and individual countries, (3) Dumitrescu and Hurlin causality test indicates a unidirectional causality running from economic growth to both life and non-life insurance and infers the absence of causal connection between life and non-life insurance and economic growth.
Highlights
There are many factors that stimulate economic growth and among them, the financial development is considered a vital component of economic development
Despite this growing body of literature attempting to explore the nature of causality between the development of insurance markets and economic growth, a consensus was not found at this moment, further research is needed
The variables incorporated in our applied section are described in Table 1: growth rate was employed to capture economic development (GRW), life insurance penetration (LIFEINS), and non-life insurance penetration (NON-LIFE) were used to measure insurance sector developmet
Summary
There are many factors that stimulate economic growth and among them, the financial development is considered a vital component of economic development. The study of Caporale et al (2015) emphasizes that the financial sector in CEE countries is more developed compared to the one in the Southeastern European and Baltic countries (Bulgaria, Romania, Estonia, Latvia, and Lithuania) Even these countries experienced a similar economic system, after the fall of communism economic development levels evolved differently over time. This study attempts to provide new reliable evidence for a causal link between the insurance market and economic development using a panel of 14 CEE countries over the period 1998–2016. Evidence for insurance growth nexus was found for different samples including various CEE countries in studies conducted by Ćurak et al (2009), Njegomir and Stojic (2010), Pradhan et al (2017), Peleckienė et al (2019), and Wanat et al (2019). The remainder of this paper is divided as follows: Section 1 summarizes the earlier studies, Section 2 describes the data and research methodology applied in our research, Section 3 discusses the main empirical findings obtained from panel data analysis and last Section introduces the main conclusions
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
