Abstract
This paper attempts to analyse the effect of insurance development on sophistication measured by the economic complexity index. Empirical analyses are carried out on a sample of 36 African countries over the period 2003-2019. In order to limit potential endogeneity biases, we run the two-step system Generalized Method of Moments and the Lewbel estimator. Empirical results, robust to a set of sensitivity analyses, show that insurance development can foster economic complexity in Africa. Moreover, when distinguishing between life and non-life insurance, empirical results remain globally unchanged, with a greater effect of non-life insurance as compared to that of life insurance. Furthermore, the mediation analysis enabled us to identify innovations and investments as some transmission channels through which insurance development may affect economic complexity in Africa. Thus, African leaders would do well to improve the regulation of the insurance business to enable it to participate effectively in financing the economy and managing risks, thereby stimulating economic complexity.
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 callMore From: The Journal of International Trade & Economic Development
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
