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THE EFFECT OF INSURANCE PREMIUM ON ECONOMIC GROWTH IN EUROPEAN UNION COUNTRIES: PANEL DATA ANALYSIS

Year 2020, Volume: 12 Issue: 23, 442 - 451, 26.11.2020
https://doi.org/10.20990/kilisiibfakademik.705585

Abstract

Funds collected as insurance premiums are very important for the development and deepening of the national economies. These premiums paid to insurance companies provide funds for capital markets by creating savings sources. The aim of this study is to investigate how and in what direction the insurance premium volume affects the economic growth of these 25 countries. For this purpose, Johansen Cointegration, Kao cointegration, panel FMOLS, Dumitrescu and Hurlin (2012) Panel Granger Causality methods were used. Cointegration tests show that economic growth and insurance premium volume variables have long-term cointegration relationships. According to Panel FMOLS test results, a 1% increase in insurance premium volumes leads to an increase of 0.113% in economic growth. According to Dumitrescu and Hurlin (2012) panel Granger causality analysis, there is one-way causality from insurance volumes to economic growth.

References

  • ADETUNJI, A. L., NWUDE, E. C., and UDEH, S. N. (2018). “Interface of Insurance and Economic Growth: Nigerian Experience”, International Journal of Economics and Financial Issues, 8(4),16-26.
  • AKPAN, I.T. and JOSEPH, E. M. (2017). “Comparative analysis of insurance companies and commercials banks’ investment portfolios and economic growth in Nigeria”, Arabian Journal of Business and Management Revie (Nigerian Chapter),4(2),6-25.
  • BAKAR, Ö., BALKAN, İ., and GÜLER, M. (2018). “Orta gelirli ülkelerde hayat sigortalarının ekonomik açıdan değerlendirilmesi: Güney Afrika ve Türkiye Karşılaştırması”, Finansal Araştırmalar ve Çalışmalar Dergisi, 10(18), 20-36.
  • CAVALCANTE, R. T., SOBREIRO, V. A., and KIMURA, H. (2018). “Determinants of the non-life insurance market in Brazil”, Review of Development Finance, 8, 89-95.
  • CHIDIMMA, I. E., NWANNEBUIKE, U.S., and OKONKWO, O. M. (2019). “Effects of financial deepening on economic growth of Nigeria (1981-2016)”, International Academy Journal of Business Admisintration Annals,7(1), 54-67.
  • CHILOKWU, O., SOTONYE, M.G., EGOR, H., AKUBUIKE, and N. E. (2019). “Impact of fishery agricultural loans and co-operators’ insurance premium on economic growth of fishery production sub-sector in Nigeria”, IOSR Journal of Economics and Finance (IOSR-JEF),10(1),60-68.
  • COSTACHE, B. (2018). “The incidence of insurance on economic growth in Italy, France, United Kingdom and Romania”, Financial Studies,3,56-65.
  • DASH, S., PRADHAN, R.P., MARADANA, R.P., GAURAV, K., ZAKI, D.P., and JAYAKUMAR, M. (2018). “Insurance market penetration and economic growth in Eurozone countries: time series evidence on causality”, Future Business Journal 4,50-67.
  • GRACE, M.F. and SJOQUIST, D. L. (2019). “Do property casualty insurance firms locate to minimize insurance premium taxes?”, Risk management and insurance review, 22(1),101-125.
  • GUPTA, R., LAHIANI, A., LEE, C., and LEE, C. (2018). “Asymmetric Dynamics of insurance premium: the impacts of output and economic policy uncertainty”, Empirical Economics,1-20.
  • HATEMI-J, A., LEE, C., LEE, C., and GUPTA, R. (2018). “Insurance activity and economic performance: Fresh evidence from asymmetric panel causality tests”, International Finance, 1-20.
  • HUSSEIN, M. A. and ALAM, S. (2019). “The Role of Insurance Sector in the Development of the Economy of Oman”, Global Journal of Economics and Business 6(2), 356- 364.
  • FADUN, O. S. and SHOYEMI, O. S. (2018). “Insurance investment funds and economic growth in Nigeria: An empirical analysis (2000 – 2015)”, International Journal of Development and Management Review,13(1),73-88.
  • GÜVEL, E. A. and GÜVEL, A. Ö. (2002). Sigortacılık, Ankara: Seçkin Yayıncılık. Hou, H. and Cheng, S. (2017). “The dynamic effects of banking, life insurance, and stock markets on economic growth”, Japan and the World economy, 41, 87-98.
  • IYODO, B. Y., SAMUEL, S. E., and INYADA, S.J. (2018). “Effect of insurance industry performance on economic growth in Nigeria”, International of Journal of Business and Finance Management Research, 6, 22-33.
  • KAUSHAL, S. and GHOSH, A. (2018). “Banking, insurance and economic growth in India: An empirical analysis of relationship from regulated to liberalized era”, Journal of Financial Economic Policy, 10(1),17-37.
  • KAYALI, A. C. (2007). “2000-2006 Döneminde Türkiye’de Faaliyet Gösteren Sigorta Şirketlerinin Etkinlik Değerlendirmesi”, Yönetim ve Ekonomi, 14(2), 103- 115.
  • LEE, C., LEE, C., and CHIOU, Y. (2017). “Insurance activities, globalization and economic growth: New methods, new evidence”, Journal of International Financial Markets, InstitutionsandMoney,51,155-170.
  • MOHY UL DIN, S., REGUPATHI, A., and ABU-BAKAR, A. (2017). “Insurance effect on economic growth – among economies in various phases of developmen”t, Review of International Business and Strategy, 27(4), 501-519.
  • MOHY UL DIN, S., ABU-BAKAR, A., and REGUPATHI, A. (2017). “Does insurance promote economic growth: A comparative study of developed and emerging/ developing economies”, Cogent Economics and Finance, 5,1-12.
  • OITSILE, B., GALEBOTSWE, O., and SEKWATI, L. (2018). “Insurance- economic growth nexus: evidence from Botswania”, Asian Economic and Financial Review, 8(6),843-852.
  • ONYEBUCHI, B., NWANKWO, S. P., and ONUKA, O. I. (2018). “Insurance sub-sector development: an emerging pillar for economic growth and sustainability in Nigeria”, Journal of Economics, Finance and Management Studies, 1(1),75-84.
  • ÖZBOLAT, M. (2009). Temel Sigortacılık, (3.Baskı). Ankara: Seçkin Yayıncılık.
  • PANT, S. and BAHADUR KC, F. (2017). “Contribution of insurance in economic growth of Nepal”, Journal of Advanced Academic Research,4(1),99-110.
  • PRADHAN, R. P., ARVIN, M. B., BAHMANI, S., BENNETT, S. E., and HALL, J.H. (2017). “Insurance–growth nexus and macroeconomic determinants: evidence from middle-income countries”, Emprical Economics, 52(4), 1337-1366.
  • SAFITRI, K. A. (2019). “The contribution of life and non-life insurances on ASEAN economic growth”, Management Science Letters, 9,957–966.
  • SAWADOGO, R., GUERINEAU, S., and OUEDRAOGO, I. M. (2018). “Life insurance development and economic growth: evidence from developing countries”, Journal of economic development, 43(2), 1-28.
  • SHAHBAZ, M., OLASEHINDE-WILLIAMS, G., and BALCILAR, M. (2018). “The long-run effect of geopolitical risks on insurance premiums, Eastern Mediterranean University”, Department of Economics, Discussion Paper, 15-44.
  • SKALSKA, M. (2018). “The relationship between insurance development and economic growth: The motor third party liability insurance in the Czech Republic”, The 12th International Days of Statistics and Economics, Prague, September 6-8.
  • WANG, K. and LEE, Y. (2018). “The impacts of life insurance asymmetrically on health expenditure and economic growth: dynamic panel threshold approach”, Economic Research-Ekonomska Istraživanja, 31:1, 440-460.
  • ZHAO Q. and CHENG, D. (2018). “A Study on the Relationship between the Development of Social Insurance Industry and Economic Growth in China”, 2018 International Conference on Economics, Finance, Business, and Development (ICEFBD 2018),389-392.
Year 2020, Volume: 12 Issue: 23, 442 - 451, 26.11.2020
https://doi.org/10.20990/kilisiibfakademik.705585

Abstract

References

  • ADETUNJI, A. L., NWUDE, E. C., and UDEH, S. N. (2018). “Interface of Insurance and Economic Growth: Nigerian Experience”, International Journal of Economics and Financial Issues, 8(4),16-26.
  • AKPAN, I.T. and JOSEPH, E. M. (2017). “Comparative analysis of insurance companies and commercials banks’ investment portfolios and economic growth in Nigeria”, Arabian Journal of Business and Management Revie (Nigerian Chapter),4(2),6-25.
  • BAKAR, Ö., BALKAN, İ., and GÜLER, M. (2018). “Orta gelirli ülkelerde hayat sigortalarının ekonomik açıdan değerlendirilmesi: Güney Afrika ve Türkiye Karşılaştırması”, Finansal Araştırmalar ve Çalışmalar Dergisi, 10(18), 20-36.
  • CAVALCANTE, R. T., SOBREIRO, V. A., and KIMURA, H. (2018). “Determinants of the non-life insurance market in Brazil”, Review of Development Finance, 8, 89-95.
  • CHIDIMMA, I. E., NWANNEBUIKE, U.S., and OKONKWO, O. M. (2019). “Effects of financial deepening on economic growth of Nigeria (1981-2016)”, International Academy Journal of Business Admisintration Annals,7(1), 54-67.
  • CHILOKWU, O., SOTONYE, M.G., EGOR, H., AKUBUIKE, and N. E. (2019). “Impact of fishery agricultural loans and co-operators’ insurance premium on economic growth of fishery production sub-sector in Nigeria”, IOSR Journal of Economics and Finance (IOSR-JEF),10(1),60-68.
  • COSTACHE, B. (2018). “The incidence of insurance on economic growth in Italy, France, United Kingdom and Romania”, Financial Studies,3,56-65.
  • DASH, S., PRADHAN, R.P., MARADANA, R.P., GAURAV, K., ZAKI, D.P., and JAYAKUMAR, M. (2018). “Insurance market penetration and economic growth in Eurozone countries: time series evidence on causality”, Future Business Journal 4,50-67.
  • GRACE, M.F. and SJOQUIST, D. L. (2019). “Do property casualty insurance firms locate to minimize insurance premium taxes?”, Risk management and insurance review, 22(1),101-125.
  • GUPTA, R., LAHIANI, A., LEE, C., and LEE, C. (2018). “Asymmetric Dynamics of insurance premium: the impacts of output and economic policy uncertainty”, Empirical Economics,1-20.
  • HATEMI-J, A., LEE, C., LEE, C., and GUPTA, R. (2018). “Insurance activity and economic performance: Fresh evidence from asymmetric panel causality tests”, International Finance, 1-20.
  • HUSSEIN, M. A. and ALAM, S. (2019). “The Role of Insurance Sector in the Development of the Economy of Oman”, Global Journal of Economics and Business 6(2), 356- 364.
  • FADUN, O. S. and SHOYEMI, O. S. (2018). “Insurance investment funds and economic growth in Nigeria: An empirical analysis (2000 – 2015)”, International Journal of Development and Management Review,13(1),73-88.
  • GÜVEL, E. A. and GÜVEL, A. Ö. (2002). Sigortacılık, Ankara: Seçkin Yayıncılık. Hou, H. and Cheng, S. (2017). “The dynamic effects of banking, life insurance, and stock markets on economic growth”, Japan and the World economy, 41, 87-98.
  • IYODO, B. Y., SAMUEL, S. E., and INYADA, S.J. (2018). “Effect of insurance industry performance on economic growth in Nigeria”, International of Journal of Business and Finance Management Research, 6, 22-33.
  • KAUSHAL, S. and GHOSH, A. (2018). “Banking, insurance and economic growth in India: An empirical analysis of relationship from regulated to liberalized era”, Journal of Financial Economic Policy, 10(1),17-37.
  • KAYALI, A. C. (2007). “2000-2006 Döneminde Türkiye’de Faaliyet Gösteren Sigorta Şirketlerinin Etkinlik Değerlendirmesi”, Yönetim ve Ekonomi, 14(2), 103- 115.
  • LEE, C., LEE, C., and CHIOU, Y. (2017). “Insurance activities, globalization and economic growth: New methods, new evidence”, Journal of International Financial Markets, InstitutionsandMoney,51,155-170.
  • MOHY UL DIN, S., REGUPATHI, A., and ABU-BAKAR, A. (2017). “Insurance effect on economic growth – among economies in various phases of developmen”t, Review of International Business and Strategy, 27(4), 501-519.
  • MOHY UL DIN, S., ABU-BAKAR, A., and REGUPATHI, A. (2017). “Does insurance promote economic growth: A comparative study of developed and emerging/ developing economies”, Cogent Economics and Finance, 5,1-12.
  • OITSILE, B., GALEBOTSWE, O., and SEKWATI, L. (2018). “Insurance- economic growth nexus: evidence from Botswania”, Asian Economic and Financial Review, 8(6),843-852.
  • ONYEBUCHI, B., NWANKWO, S. P., and ONUKA, O. I. (2018). “Insurance sub-sector development: an emerging pillar for economic growth and sustainability in Nigeria”, Journal of Economics, Finance and Management Studies, 1(1),75-84.
  • ÖZBOLAT, M. (2009). Temel Sigortacılık, (3.Baskı). Ankara: Seçkin Yayıncılık.
  • PANT, S. and BAHADUR KC, F. (2017). “Contribution of insurance in economic growth of Nepal”, Journal of Advanced Academic Research,4(1),99-110.
  • PRADHAN, R. P., ARVIN, M. B., BAHMANI, S., BENNETT, S. E., and HALL, J.H. (2017). “Insurance–growth nexus and macroeconomic determinants: evidence from middle-income countries”, Emprical Economics, 52(4), 1337-1366.
  • SAFITRI, K. A. (2019). “The contribution of life and non-life insurances on ASEAN economic growth”, Management Science Letters, 9,957–966.
  • SAWADOGO, R., GUERINEAU, S., and OUEDRAOGO, I. M. (2018). “Life insurance development and economic growth: evidence from developing countries”, Journal of economic development, 43(2), 1-28.
  • SHAHBAZ, M., OLASEHINDE-WILLIAMS, G., and BALCILAR, M. (2018). “The long-run effect of geopolitical risks on insurance premiums, Eastern Mediterranean University”, Department of Economics, Discussion Paper, 15-44.
  • SKALSKA, M. (2018). “The relationship between insurance development and economic growth: The motor third party liability insurance in the Czech Republic”, The 12th International Days of Statistics and Economics, Prague, September 6-8.
  • WANG, K. and LEE, Y. (2018). “The impacts of life insurance asymmetrically on health expenditure and economic growth: dynamic panel threshold approach”, Economic Research-Ekonomska Istraživanja, 31:1, 440-460.
  • ZHAO Q. and CHENG, D. (2018). “A Study on the Relationship between the Development of Social Insurance Industry and Economic Growth in China”, 2018 International Conference on Economics, Finance, Business, and Development (ICEFBD 2018),389-392.
There are 31 citations in total.

Details

Primary Language Turkish
Subjects Economics
Journal Section RESEARCH PAPERS
Authors

Neylan Kaya 0000-0003-2645-3246

Nazife Özge Kılıç 0000-0002-6738-3638

Publication Date November 26, 2020
Published in Issue Year 2020 Volume: 12 Issue: 23

Cite

APA Kaya, N., & Kılıç, N. Ö. (2020). THE EFFECT OF INSURANCE PREMIUM ON ECONOMIC GROWTH IN EUROPEAN UNION COUNTRIES: PANEL DATA ANALYSIS. Akademik Araştırmalar Ve Çalışmalar Dergisi (AKAD), 12(23), 442-451. https://doi.org/10.20990/kilisiibfakademik.705585
AMA Kaya N, Kılıç NÖ. THE EFFECT OF INSURANCE PREMIUM ON ECONOMIC GROWTH IN EUROPEAN UNION COUNTRIES: PANEL DATA ANALYSIS. Akademik Araştırmalar ve Çalışmalar Dergisi (AKAD). November 2020;12(23):442-451. doi:10.20990/kilisiibfakademik.705585
Chicago Kaya, Neylan, and Nazife Özge Kılıç. “THE EFFECT OF INSURANCE PREMIUM ON ECONOMIC GROWTH IN EUROPEAN UNION COUNTRIES: PANEL DATA ANALYSIS”. Akademik Araştırmalar Ve Çalışmalar Dergisi (AKAD) 12, no. 23 (November 2020): 442-51. https://doi.org/10.20990/kilisiibfakademik.705585.
EndNote Kaya N, Kılıç NÖ (November 1, 2020) THE EFFECT OF INSURANCE PREMIUM ON ECONOMIC GROWTH IN EUROPEAN UNION COUNTRIES: PANEL DATA ANALYSIS. Akademik Araştırmalar ve Çalışmalar Dergisi (AKAD) 12 23 442–451.
IEEE N. Kaya and N. Ö. Kılıç, “THE EFFECT OF INSURANCE PREMIUM ON ECONOMIC GROWTH IN EUROPEAN UNION COUNTRIES: PANEL DATA ANALYSIS”, Akademik Araştırmalar ve Çalışmalar Dergisi (AKAD), vol. 12, no. 23, pp. 442–451, 2020, doi: 10.20990/kilisiibfakademik.705585.
ISNAD Kaya, Neylan - Kılıç, Nazife Özge. “THE EFFECT OF INSURANCE PREMIUM ON ECONOMIC GROWTH IN EUROPEAN UNION COUNTRIES: PANEL DATA ANALYSIS”. Akademik Araştırmalar ve Çalışmalar Dergisi (AKAD) 12/23 (November 2020), 442-451. https://doi.org/10.20990/kilisiibfakademik.705585.
JAMA Kaya N, Kılıç NÖ. THE EFFECT OF INSURANCE PREMIUM ON ECONOMIC GROWTH IN EUROPEAN UNION COUNTRIES: PANEL DATA ANALYSIS. Akademik Araştırmalar ve Çalışmalar Dergisi (AKAD). 2020;12:442–451.
MLA Kaya, Neylan and Nazife Özge Kılıç. “THE EFFECT OF INSURANCE PREMIUM ON ECONOMIC GROWTH IN EUROPEAN UNION COUNTRIES: PANEL DATA ANALYSIS”. Akademik Araştırmalar Ve Çalışmalar Dergisi (AKAD), vol. 12, no. 23, 2020, pp. 442-51, doi:10.20990/kilisiibfakademik.705585.
Vancouver Kaya N, Kılıç NÖ. THE EFFECT OF INSURANCE PREMIUM ON ECONOMIC GROWTH IN EUROPEAN UNION COUNTRIES: PANEL DATA ANALYSIS. Akademik Araştırmalar ve Çalışmalar Dergisi (AKAD). 2020;12(23):442-51.