Abstract
Financial Sector Policies and Economic Growth: Evidence From Insurance Sector in Nigeria
Highlights
Every business needs two types of capital which are fixed capital and working capital; fixed capital is raised from the capital market, while working capital is obtained from the money market (Babu, 2018)
Gross capital formation, total insurance premium and total insurance investment were used to represent financial sector policies, while gross domestic product was used as proxy for economic growth
The study found that gross capital formation and total insurance investment were significantly related to gross domestic product, while total insurance premium had insignificant effect on GDP
Summary
Every business needs two types of capital which are fixed capital and working capital; fixed capital is raised from the capital market, while working capital is obtained from the money market (Babu, 2018). The financial system (comprising the capital and money markets) of any country plays a very vital role in the development or growth of its economy. It is a pivotal wheel that encourages the investment culture and savings behaviour which in turns create a bridge between investment and savings This bridge facilitates the increase in markets and helps the financial expansion. Insurance companies play an important role by providing cover for high risk businesses. Insurance companies are among the non bank financial institutions which plays an important role in the financing link within the financial system in an economy. Insurance companies plays dual role on the field of the economy: one as a risk bearer and manager and secondly as a base for capital formation. When an economy is healthy and happy without environmental change it is said that development is viable
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