Abstract
Earlier studies on the impact of the insurance sectors activities on economic growth have largely failed. To examine the financial development market interaction of pensions and mutual funds linkages, through which insurance assets affects economic growth. This study re-examines the impact of life insurance premium volume, non-life insurance premium volume, insurance company assets, pension fund assets and mutual fund assets on economic growth. Using panel data of 33 countries over the period 2000-2016. The study applied the Autoregressive Distributed Lag (ARDL) model in panel setting using the PMG (Pooled Mean Group) and MG (Mean Group) estimators in this analysis. The study findings indicate that cointegration exists among all series and that insurances and mutual funds stimulate economic growth in both the short and long run.
Highlights
Individuals, companies, institutions and or the public sector seek protection against future financial losses, adverse events or the smoothing of incomes and consumptions, through the pooling or transferring of their risks
This study re-examines the impact of life insurance premium volume, non-life insurance premium volume, insurance company assets, pension fund assets and mutual fund assets on economic growth
The results without including time trend indicated that the null hypothesis of unit root cannot be rejected for real GDP per capita, mutual fund assets, insurance company assets, and non-life insurance premium volume in levels, whereas life insurance premium volume, and pension fund assets are level stationary
Summary
Individuals, companies, institutions and or the public sector seek protection against future financial losses, adverse events or the smoothing of incomes and consumptions, through the pooling or transferring of their risks. Which is the most basic role of insurances, pensions and mutual funds companies. The scope of protections and the associated conditions and financial commitments are normally defined between the provider and the policyholder and are typically transacted through a network of agents or brokers. Insurance is a promise to compensate or indemnify the consequences of a loss-producing event. Pension funds offer savings products very similar to those offered by insurers and may include risk-mitigating features such as guarantees on their principals and interests. Unlike banks and insurance companies, mutual funds do not assume credit and insurance risks. Whereas mutual funds offer corporations and households the means to invest in a diversified portfolio for a financial www.scholink.org/ojs/index.php/jepf
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