Abstract
This paper analyzes the relationship among foreign capital insurance market, FDI and economic growth in China. We use unit root test, least square regression and Granger causality test to examine the relationship with the data over the period 1984-2015. It is found that the development of China’s foreign capital insurance market has not promoted China’s economic growth, FDI has promoted China’s economic growth, and China’s economic growth has generally promoted the development of foreign capital insurance market. The channels of insurance market acting on economic growth are not smooth enough for foreign capital in China, and its action modes may be mainly applicable to China’s domestic insurance market.
Highlights
After 40 years of rapid development since the reform and opening up in 1978, China has maintained double-digit economic growth
The channels of insurance market acting on economic growth are not smooth enough for foreign capital in China, and its action modes may be mainly applicable to China’s domestic insurance market
The results showed that when the changes of the return of market index was controlled, there was a significant and positive relationship between the return of insurance security and the future economic growth, and the effect of law and regulation on the link between the role of insurance and economic growth was more pronounced in developed markets countries than in emerging markets countries
Summary
After 40 years of rapid development since the reform and opening up in 1978, China has maintained double-digit economic growth It has become the world’s second-largest economy, with a gross domestic product of 74.4 trillion RMB yuan, or 10.7 trillion US dollars in 2016. What are the relationships among the development of China’s foreign capital insurance market, FDI and China’s economic growth? This paper discusses the relationship between financial market and economic growth from the angle of the foreign capital insurance market and FDI. This will do great help for a country to get acquaintance of its foreign capital insurance market’s function, FDI’s influence and the government’s work situation. This paper is divided into the following parts: the second part is literature review, combing the existing relevant research; the third part is theoretical analysis; the fourth part is empirical analysis, using unit root test, the least square regression analysis and granger causality test to test the relationships among variables, as well as the conclusions and explanations; the fifth part is the policy recommendations
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