Panel Causality Research Articles

Pollution Haven Hypothesis and EKC Dynamics: Moderating Effect of FDI. A Study in Shanghai Cooperation Organization Countries

Abstract This paper provides a comprehensive analysis of the nexus between economic growth and environmental degradation, with a specific focus on carbon dioxide (CO2) emissions. It leverages a dataset spanning from 1991 to 2021, encompassing all 12 member nations of the Shanghai Cooperation Organization (SCO). The investigation includes a wide array of statistical examinations, such as stationarity tests, cross-section dependence, and co-integration analysis. The Johansen Fisher Panel co-integration test is employed to reveal long-term correlations between the variables. Furthermore, the paper adopts the Dumitrescu and Hurlin panel causality model, which accommodates variations in causal relationships across different countries. Additionally, the study analyses the asymmetric impact of GDP on carbon emissions across various quantiles using quantile regression. The findings of this research yield valuable insights, highlighting a significant positive correlation between GDP and CO2 emissions, suggesting that higher income levels are associated with greater pollution. However, the paper also illuminates more intricate scenarios, such as those characterized by inverted U-shaped and N-shaped Environmental Kuznets Curve (EKC) patterns, revealed through DOLS estimations. These estimations consider FDI, inflation, and industrialization as control variables. This research delves into the Pollution Haven Hypothesis and examines the interaction effects of FDI with other considered variables. These insights contribute to a deeper understanding of the complex dynamics between economic growth and environmental impact within the SCO member nations.

The relationship between insurance development, population, economic growth, and health expenditures in OECD countries: a panel causality analysis

AbstractThis paper examines the relationship between insurance development, population, economic growth, and health expenditures for a panel of 31 OECD countries over the period 1995–2021. A dynamic panel data analysis based on cointegration, FMOLS, DOLS, VECM, and Granger causality tests is employed to suggest for the existence of a long-run relationship among variables. The long-run results show that insurance development, national income, and population exhibit positive impacts on health expenditures. The results reveal that insurance factor has larger income effects than substitution effects on health expenditures. Regarding the short-run causal relationship between the variables, the empirical results suggest that economic growth strengthens health expenditure growth, while insurance growth reduces it. In the short-run, insurance development has a crowding-out effect since it produces larger substitution effects than income effects. The results provide political implications that governments need to concern the short-run crowding-out effect of private insurance sections on health expenditures when making fiscal policies on public health expenditures.

The impacts of different types of globalization on energy security risk: Can globalization be a remedy for the energy security risk of OECD countries?

This study analyzes the impact of globalization and its sub-dimensions on energy security risk for OECD countries. In our study, annual data of 26 OECD countries for the period 1980-2018 were used. Second generation panel data techniques were used as the methodology. The results of the analysis show that economic, political and aggregate globalization increases energy security risk, while social globalization is statistically insignificant. The Dumitrescu-Hurlin panel causality test results demonstrate that there is a unidirectional causality relationship between inflation and energy security risk, and a bidirectional causality relationship between economic globalization, social globalization, political globalization, aggregate globalization, GDP and Gross Fixed Capital Formation and energy security risk. The study also analyzed how the impact of globalization on energy security risk varies across countries. The results of the analysis reveals that there are significant differences in the direction, significance and coefficient size of the relationship across countries. These findings suggest that the effects of globalization on energy security risks vary across countries. Therefore, countries should develop policies to minimize energy security risks by taking into account their own dynamics.

DEVELOPMENT-ECONOMIC FREEDOMS INTERACTION: A COMPARATIVE ANALYSIS OF D8 AND G8 COUNTRY GROUPS

One viewpoint, which has been gaining traction recently, posits that augmenting economic freedom within liberal markets while minimizing public intervention spurs development. Conversely, another standpoint suggests that as development progresses, there emerges a heightened demand for greater economic freedom, resulting in the implementation of liberal policies. In this context the primary objective of this study is to scrutinize the presence of causality between economic freedom and development. Additionally, the study delves into whether this causal relationship, if extant, is consistent across countries at varying stages of development. Consequently, an examination is conducted on two distinct country groups, namely D8 and G8, employing the Dumitrescu-Hurlin panel causality test. This method dissects the directional link between economic freedom and development for these country clusters spanning the period 2000-2019. The analysis reveals that within D8 nations, a reciprocal causality exists between economic freedom and development. In contrast, among G8 countries, no causal link emerges from economic freedom to development, while a unilateral causal relationship emerges from development to economic freedom.

Exploring the drivers of ecological footprint: Impacts of road transportation infrastructure, transport tax, and environment technologies

This study explores the dynamic effects of road transportation infrastructure, transport taxes, economic growth, trade openness, and environmental technologies on the ecological footprint using three quantile regression techniques: Simultaneous, Powell, and Method of Moments Quantile Regression (MMQR). These variables are selected for their significant influence on both economic outcomes and environmental sustainability, reflecting the interconnectedness of transportation systems, government policies, and technological advancements in shaping ecological impacts. Based on panel data from 19 European countries between 1995 and 2020, the results reveal that investments in road infrastructure and higher transport taxes contribute to reducing ecological footprint. At the middle and high quantiles, advancements in environment-related technologies further decrease the ecological footprint, whereas trade openness tends to worsen ecological quality. Importantly, the relationship between GDP and the ecological footprint follows an inverted U-shape, confirming the Environmental Kuznets Curve (EKC) hypothesis across all quantiles, which suggests that economic growth can support environmental sustainability in the long run. These findings are validated by robustness checks using fully modified ordinary least squares (FMOLS), dynamic ordinary least squares (DOLS), and canonical cointegration regression (CCR) models. Key policy implications include the need for targeted investments in road infrastructure and transport tax strategies, tailored to national contexts, along with technology-driven strategies to curb environmental degradation. Lastly, the panel causality test reveals unidirectional causality from economic growth, road transportation infrastructure, and environment-related technologies to ecological footprint, highlighting their significance as short-term contributors to environmental improvement.

Is the Romer Hypothesis valid for Newly Industrialized Countries? Evidence from panel ARDL

Purpose ― This study investigates the effect of trade openness on inflation, referred to as the Romer hypothesis, for Newly Industrialized Countries (NICs) from 1990 to 2022.Methods ― It uses a panel ARDL method and the Dumitrescu-Hurlin (2012) causality test. Economic growth, credit, and money supply are included in the model as independent variables. Findings ― The findings reveal no statistically significant long-term and short-term relationships between trade openness and inflation. However, money supply has statistically significant positive effects on inflation in the long run, while economic growth and credit exhibit no statistically significant impact. In the short run, money supply and economic growth reduced inflation. According to the Dumitrescu-Hurlin (2012) panel causality test, a bidirectional relationship exists between inflation and economic growth, money supply, and credit, while a unidirectional relationship is observed between inflation and trade openness. Implications ― Reducing the external dependency of sectors that rely on imported inputs is necessary to mitigate the adverse effects of trade openness on inflation in NICs. It is crucial to ensure that monetary policy helps align money supply and credit expansions with real sector trends.Originality ― This research is pioneering in its focus on testing the Romer hypothesis for Newly Industrialized Countries (NICs).

Linking Human Development Index, Urbanization, Economic Growth and the Ecological Footprint: The Case of MINT Countries

The main purpose of this study is to investigate the relationship between human development index, urbanization, economic growth and ecological footprint in MINT countries (Mexico, Indonesia, Nigeria and Turkiye) for the years 2003-2022. First of all, the cointegration relationship between human development index, urbanization, economic growth and ecological footprint was examined with Gengenbach, Urbain and Westerlund (2016) panel cointegration. As a result of the cointegration analysis, it was concluded that the variables were cointegrated. The long-term relationship was estimated by the DOLSMG method. According to the DOLSMG estimator, it was determined that a 1% increase in the human development index in MINT countries reduced the ecological footprint by 1.89%, a 1% increase in urbanization increased the ecological footprint by 0.22%, and a 1% increase in economic growth increased the ecological footprint insignificantly. Secondly, the relationship between human development index, urbanization, economic growth and ecological footprint was examined with Dumitrescu and Hurlin (2012) panel causality analysis. According to the findings, there is a bidirectional causality relationship between ecological footprint and urbanization in MINT countries. Additionally, the findings of the study show that there is a unidirectional causality relationship from ecological footprint to human development index and a unidirectional causality relationship from economic growth to ecological footprint.

Unraveling the Effects of Economic Growth and Unemployment on Tobacco Use: A Panel Data Approach.

The economic situation is recognized as a significant factor influencing tobacco consumption. Accordingly, this research aims to investigate the relationship between economic growth, unemployment, and tobacco use. This investigation employs data from 1985 to 2019 to elucidate the relationship between economic growth, unemployment, and tobacco consumption in a select group of OECD countries. Employing Pedroni and Johansen-Fisher Panel Co-Integration Tests, we assess the co-integrating relationships. Furthermore, FMOLS and DOLS techniques are applied, complemented by the Dumitrescu Hurlin Panel Causality Test. FMOLS and DOLS results suggest that a 1% increase in GDP leads to a 6.46% and 7.29% rise in tobacco consumption, respectively, while GDP squared results in a 0.39% and 0.43% decrease. However, both tests failed to establish a significant relationship between tobacco consumption and unemployment. Cointegration was confirmed by Johansen-Fisher and Pedroni tests. Dumitrescu-Hurlin causality tests revealed direction of granger causality from economic growth to tobacco consumption, but not with unemployment. Tobacco consumption declined across all countries studied. Economic growth shows a positive association, while GDP squared has a negative association, indicating an inverted U-shaped relationship. No significant relationship was found with unemployment in the employed tests. In addition to the measures implemented by countries to reduce tobacco consumption, economic factors also exert a significant relation with smoking behavior. The available results suggests that economic growth initially associated with increase in tobacco consumption but reduction in later stages indicating a long-term inverse relationship between economic growth and tobacco use.

Energy Poverty and Environmental Quality Nexus: Empirical Evidence from Selected South Asian Countries

South Asian countries are included in the economies of developing Asia. The region of South Asia is predominantly affected by energy poverty issues due to a heavy reliance on conventional energy and unpredictable access to energy services. It has about a quarter of the world's population and is home to three of the world's ten most populated countries: India, Pakistan, and Bangladesh. This study investigates environmental sustainability dynamics in South Asian countries from 2000 to 2021, utilizing the Cross-sectional Autoregressive Distributed Lag (CS-ARDL) and Dumitrescu-Hurlin (D-H) causality methods. The research offers insights into the long-term trends and causal relationships that shape environmental outcomes in South Asian nations. Based on empirical findings, in the long-term, it is revealed that increases in energy poverty, economic growth, income inequality, and capital formation raise greenhouse gas (GHG) emissions, while renewable energy and labor reduce GHG emissions. On the other hand, the error correction term shows the speed of adjustment toward equilibrium at 0.75%. Furthermore, the D-H panel causality reveals a directional link between variables. These findings highlight the urgent need for South Asian countries to implement policies to address energy poverty, promote renewable energy adoption, and reduce income inequality to mitigate GHG emissions and achieve long-term environmental sustainability effectively.

Examining the Influence of Renewable Energy Consumption, Technological Innovation, and Export Diversification on Economic Growth: Empirical Insights from E-7 Nations

The present research focuses on the endogenous development theory and investigates the relationships between economic growth (dependent variable) and renewable energy consumption, technological innovation, and export diversification (independent variables) in seven emerging economies known as the E-7. Previous studies have examined these factors individually but have not explored their combined impact on the E-7 economies. Therefore, this study contributes to the existing literature on the effects of renewable energy consumption, technological advancement, and export diversification on economic development. This study analyses the dynamic connections among these variables in seven selected emerging countries: Brazil, China, Indonesia, India, Mexico, Russia, and Turkey. Panel data from 1990 to 2022 are utilised, and various methodologies, including panel cointegration, the pooled mean group–autoregressive distributed lag (PMG-ARDL) estimator, and robustness tests, such as the fully modified ordinary least square and dynamic ordinary least square tests, are employed. Empirical inferences are drawn using the Dumitrescu–Hurlin panel causality (DHC) test, and the long-run relationships among the variables are validated using the Westerlund residual cointegration tests. The results from the PMG-ARDL estimator show that renewable energy consumption, technological advancement, and export diversification have a significant and positive impact on economic expansion, confirming the validity of the endogenous growth model in the E-7 countries. The control variable of the financial sector has a positive but insignificant effect on economic growth, while trade openness has a negative and significant effect. The DHC test results indicate a neutral feedback effect of renewable energy consumption on economic growth. The findings also reveal a unidirectional causal relationship between technological innovation and economic growth. Overall, these findings provide valuable insights for economic policymakers in the E-7 countries. By removing barriers to renewable energy consumption, technological innovation, and export diversification, policymakers can promote sustainable economic development.

Relationship between maritime transportation and economic growth: highest maritime transport European countries

Maritime transport is one of the most widely used transport channels used by countries in foreign trade. The development of maritime transport affects the economic growth levels of countries. In addition, the increase in the level of economic growth of countries increases their share in international foreign trade and this situation increases the importance given by countries to maritime transport day by day. In this context, the study aims to determine whether there is any causality relationship between maritime transport and economic growth variables in Belgium, France, Germany, Italy, Netherlands, Spain, Türkiye, and the United Kingdom, which have the highest maritime transport among European countries. The bootstrap panel causality test was employed to examine the causality relationships between the variables over the time frame of 2008:Q1-2020:Q2. According to the findings, there is a causality relationship from economic growth to maritime transportation in all countries except Italy and the Netherlands. There is a causality relationship from maritime transportation to economic growth in Türkiye and the United Kingdom. As a result, the relationship between maritime transport and economic growth varies from country to country. This situation reveals the necessity of developing national policies for maritime transport by considering the economic structures of the countries.

Unlocking the potential of natural resources, fintech and fiscal policy for carbon neutrality; evidence from N-11 nations

By controlling the quantity of greenhouse gases in the natural environment, carbon neutrality is designed to reduce the adverse impacts of climate change. The specific goal can be attained by enforcing carbon dioxide elimination approaches, fostering the growth of fintech, fiscal policy tools, and funding in human development, along with the lowering of emissions. The current research analyzes the influence of the human development index (HDI), natural resources (NR), fintech (FT), and fiscal policy (FP) on carbon neutrality within the parameters of a policy structure. This task is performed with the objective of fulfilling the goals stated above. The ongoing research applies the innovative " General Method of Moment Quantile-based Regression (GMMQR)" and “Panel Quantile ARDL" techniques on a sample of N-11 nations to accomplish the goal. The outcomes support the idea that NR and FP function as pivotal factors in diminishing carbon neutrality. On the other hand, FT and HDI improve carbon neutrality. Moreover, in accordance with the heterogeneous panel causality test developed by Dumitrescu and hurlin (2012), NR, FP, HDI, and FT have been determined to have a unidirectional link with carbon neutrality. In regard to these findings, the research outlines a strategy designed to attain SDG 13 for the chosen nations. Decision-makers in these nations need to focus on policies that encourage the efficient use of natural resources. In addition, the chosen nations need to enhance their level of fintech to combat environmental degradation and achieve the targets of carbon neutrality.

Analysis on the relationship between coastal tourism and marine pollution: an empirical analysis of China’s 11 coastal regions

IntroductionCoastal tourism has become an important pillar of economic growth in China's coastal regions, yet no quantitative research has analyzed the relationship between coastal tourism and marine pollution.MethodsThis study, within a multivariate framework, comprehensively examines the impact of coastal tourism on marine pollution by employing various econometric techniques and focusing on four different types of marine pollutant discharges: chemical oxygen demand (COD), petroleum (PET), ammonia nitrogen (NHN), and total phosphorus (TP).Results and discussionPanel cointegration tests confirm a long-term relationship between coastal tourism and these four types of marine pollutant discharges. In the long run, coastal tourism has a significantly negative impact on COD, NHN, and TP. The results of Pooled Mean Group (PMG), Fully Modified Ordinary Least Squares (FMOLS), and Dynamic Ordinary Least Squares (DOLS) estimators show that for every 1% increase in coastal tourism revenue (TOUR), COD decreases by 0.734%, 0.536%, and 0.952% respectively; NHN decreases by 0.746%, 0.340%, and 1.633%; and TP decreases by 5.169%, 0.899%, and 0.334% respectively. However, the impact of coastal tourism on PET is not significant. The Dumitrescu-Hurlin (D-H) panel causality test results indicate different causality patterns between coastal tourism and various marine pollutant discharges. Specifically, there is a bidirectional causality between coastal tourism and COD, NHN, and a unidirectional causality between coastal tourism and PET, TP. Moreover, heterogeneity analysis reveals that coastal tourism does not significantly reduce all marine pollutant discharges in low-and middle-income coastal regions. Furthermore, compared to the central and southern coastal regions, the coastal tourism of northern regions has not significantly reduced marine pollution. This study can provide policymakers with references for developing coastal tourism and reducing marine pollutant discharges.

From petrodollars to green power: Fiscal stability and green transition in GCC economies

This study examines the influence of fiscal stability, characterized by fiscal buffers, on the green transition in the Gulf Cooperation Council (GCC) economies from 2005 to 2023. We apply two-way fixed effects, system generalized method of moments (GMM), method of moments quantile regression (MMQR), and panel causality analysis to explore these dynamics. Our findings underscore that a positive fiscal buffer resulting from a significant spread between oil prices and fiscal breakeven levels exerts a substantial positive impact on green transition efforts in GCC countries. The results reveal that countries with higher levels of renewable energy production capacity and urbanization demonstrate more pronounced advancements in green transition initiatives. Conversely, countries grappling with unstable macroeconomic conditions, such as high inflation and external debt, face considerable challenges in achieving significant improvements in green transition outcomes. Additionally, our analysis shows that fossil fuel energy fiscal subsidies negatively influence green transition efforts in the GCC region. Our study emphasizes that policymakers in GCC countries should pursue a dual-pronged strategy: leveraging positive fiscal buffers to diversify their economies in light of potential benefits from high oil prices, and channelling oil and fiscal revenues towards enhancing renewable energy production capacities. This approach aims not only to diversify economic foundations but also to strategically strengthen the infrastructure necessary for sustainable renewable energy transitions in the region over the long term.

RELATIONSHIP BETWEEN LOGISTICS SECTOR AND ECONOMIC GROWTH IN ASEAN COUNTRIES

In the modern economics, any manufacturing companies have increasingly relied on professional logistics firms, leading to rapid growth in the logistics sector as a service industry and its significant contribution to economic development. With increasing globalization and competition, countries have focused on enhancing their logistics systems to ensure stable economic growth and strengthen global trade competitiveness. In the ASEAN region, logistics plays a critical role, facilitating cross-border trade and regional connectivity. This study aims to investigate the relationship between the logistics sector, specifically air freight transportation, and economic growth in ASEAN countries, given the sector's central role in supporting supply chain management and trade activities. The primary objective of this study is to determine whether there is a causal relationship between air freight transportation (AFT), a key logistics activity, and gross domestic product (GDP) growth in six ASEAN countries. The study seeks to provide insights into how investment in logistics infrastructure, particularly in air freight, may influence economic growth in the region. The study uses panel data for six ASEAN countries from 1996 to 2021. Data on GDP growth and air freight transportation were sourced from the World Bank’s World Development Indicators database. A series of statistical tests, including the Cross-Sectional Augmented Dickey Fuller (CADF) test, Pesaran’s slope homogeneity test, and the Bootstrap Granger causality test, were performed to examine cross-sectional dependence and the causal relationship between GDP growth and air freight transportation. Descriptive statistics revealed significant disparities in air freight transportation capacity among the countries studied, with Indonesia and Thailand showing substantial air freight volumes compared to the Philippines. However, the results of the panel causality tests, including the Dumitrescu and Hurlin panel causality test, indicate that no causal relationship exists between air freight transportation and GDP growth in the six ASEAN countries.

Investigating the determinants of marine environmental degradation in Africa: What roles can economy, population, capture and energy play?

This study firstly examines the quality of marine eco-environment in Africa using Tapio decoupling model, and analyzes the sustainability level of the development of “population agglomeration - marine environment - economic growth”. Secondly, a series of econometric tools, such as ARDL, FMOLS, AMG model and DH panel causality test, are used to investigate the long- and short-term impacts of economic growth, population agglomeration, marine capture and energy consumption on the African marine eco-environment, and to analyze the differences between the sub-regions in Africa. The results indicate that: Adebayo and Kirikkaleli (2021) (Adebayo and Kirikkaleli, 2021) the decoupling state of “population-environment” has shifted from expansive negative decoupling to more optimized strong decoupling, and “economy-environment” has gradually changed from strong negative decoupling and expansive negative decoupling to strong decoupling. Ali et al. (2017) (Ali et al., 2017) There existed a bi-directional causal relationship between the degree of marine environment degradation and economic growth, population agglomeration, marine capture and energy consumption. Al-Mulali and Sab (2012) (Al-Mulali and Sab, 2012) In the short term, the economic EKC hypothesis does not hold in North and West Africa, while Central, East and Southern Africa are consistent with the EKC hypothesis. In the long term, the EKC hypothesis is valid in Central, East and Southern Africa, while is not valid in North and West Africa. Overall, reducing population agglomeration levels, marine fishing and energy consumption might mitigate marine environmental degradation in Africa.

The Interplay of Dietary Habits, Economic Factors, and Globalization: Assessing the Role of Institutional Quality.

Dietary habits are pivotal for population health and well-being, yet remain a pressing global issue, particularly in Sub-Saharan Africa (SSA), where economic instability and institutional challenges exacerbate dietary problems. Despite extensive research, there is a notable gap in the literature regarding the direct and interactive effects of institutional quality and inflationary shocks on dietary habits. This study delves into these complex interplays across 44 SSA nations from 2002 to 2022. Employing an innovative entropy method (EM) and the generalized autoregressive conditional heteroskedasticity (GARCH) modeling, the study introduces an inclusive institutional quality index and an inflationary shock predictor as crucial determinants of dietary habits in the literature. The results from the panel-corrected standard error (PCSE) method and feasible generalized least squares (FGLS) model reveal that per capita GDP, school enrollment rate, government expenditures, globalization index, and urbanization are positively associated with population dietary habits, while inflationary shock, food insecurity, and unemployment rate exert negative influences. Notably, institutional quality acts as a catalyst, amplifying the positive effects of the former group and absorbing the negative impacts of the latter on population dietary habits. Additionally, a dynamic panel causality analysis confirms a bidirectional causality nexus between population dietary habits and all variables, except for inflationary shocks, which demonstrate a unidirectional causality link. These findings carry significant policy implications, underscoring the complex dynamics between institutional quality, inflationary shocks, and dietary habits in the region. The bidirectional causality highlights the need for holistic interventions that address economic, social, and institutional factors simultaneously. Moreover, the unidirectional causality of inflationary shocks on dietary habits suggests that stabilizing inflation is critical to protecting dietary habits. These results provide critical insights for policymakers to design targeted interventions aimed at improving nutrition, bolstering institutional frameworks, and ensuring public health resilience in the face of economic and social shocks.

Empowering energy access: Exploring financial inclusion's impact on energy poverty in the fragile five economies

Energy poverty is a major issue that deepens economic challenges, especially in the five fragile states of Turkey, Brazil, South Africa, India, and Indonesia. The objective of this study is to examine the impact of financial inclusion on energy poverty, as removing financial barriers to energy access and utilisation is critical for sustainable development. The study hypothesizes that financial inclusion plays a decisive role in alleviating energy poverty. The study analyses the second generation panel methods such as AMG, Driscool-Kraay, and FMOLS using annual data from 2000 to 2021 and examines the causal relationships between variables using Dumitrescu-Hurlin panel causality test. The findings reveal that financial inclusion, low carbon technology trade, energy efficiency, economic growth, and human capital play a central role in alleviating energy poverty in these economies. On the other hand, a unidirectional causal relationship was found between financial inclusion and low carbon technology trade, human capital, energy efficiency, and energy poverty. In contrast, a bidirectional causal relationship was observed between economic growth and energy poverty. These findings provide important insights for policymakers and stakeholders; understanding the complex dynamics between financial inclusion and energy poverty can help design targeted strategies to increase energy access and promote inclusive economic development in fragile economies.

Shadow economy-income inequality nexus: a panel analysis of West African countries

ABSTRACT This paper examines the nexus between shadow economy and income inequality in the West African region. The study applies second-generation panel estimation techniques to analyze the effect and the direction of causation between the variables. The results reveal that the shadow economy reduces income inequality in the region in both short-run and long-run estimations. A similar result is documented when alternative estimation techniques are employed. In addition, the panel causality results show a bidirectional relationship between shadow economy and income inequality in the West African economy. The implications of the study are discussed.

The Relationship between Activities of the Insurance Industry and Economic Growth: The Case of G-20 Economies

The aim of this study is to examine the impact of developments in the insurance sector on economic growth. This study examines an annual dataset spanning 1992 to 2022 from ten countries within the G-20 economies, for which data is reliably accessible. The analysis employs panel cointegration and panel causality tests to explore the underlying relationships. The results show that the activities of the overall insurance sector have a positive effect on economic development, while non-life insurance activities, as a sub-component of the insurance sector, also demonstrate a similar impact. Furthermore, findings indicate the existence of a bidirectional causality relationship between economic development and non-life insurance premiums. This study provides various recommendations to policymakers in the process of developing policies on the growth of national economies.