IDEAS home Printed from https://ideas.repec.org/a/hur/ijarbs/v6y2016i10p381-391.html
   My bibliography  Save this article

Overall Governance Index for Developed and Emerging European Life Insurance Markets

Author

Listed:
  • Dragos Simona Laura
  • Mare Codruta
  • Drule Alexandra Maria

Abstract

The present study evaluates the relationship between governance and the development of the life insurance market in 31 European countries. For this, we considered the six Worldwide Governance Indicators. An overall governance index, which we called WGI, was computed based on them, using the principal component analysis. Afterwards, we employed the dynamic panel methodology in the system-GMM form to analyze the influence of WGI upon the life insurance market, having as proxy life insurance density. Additionally, we employed several socio-economic control variables. To serve our purpose, we have also divided the sample into developed and emerging economies by creating a dummy variable introduced in the analysis. All models were estimated in the robust form. Governance proved to have significant influence upon the life insurance market in the analyzed period: 2002–2012. The long-run coefficient is positive and significant. When the dummy is introduced in the analysis, the significance of the governance indicator decreases for the short term coefficient, while it disappears for the long-term one.

Suggested Citation

  • Dragos Simona Laura & Mare Codruta & Drule Alexandra Maria, 2016. "Overall Governance Index for Developed and Emerging European Life Insurance Markets," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(10), pages 381-391, October.
    • Handle: RePEc:hur:ijarbs:v:6:y:2016:i:10:p:381-391
    as

    Download full text from publisher

    File URL: http://hrmars.com/hrmars_papers/Overall_Governance_Index_for_Developed_and_Emerging_European_Life_Insurance_Markets.pdf
    Download Restriction: no
    File URL: http://hrmars.com/hrmars_papers/Overall_Governance_Index_for_Developed_and_Emerging_European_Life_Insurance_Markets.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Billio, Monica & Getmansky, Mila & Lo, Andrew W. & Pelizzon, Loriana, 2012. "Econometric measures of connectedness and systemic risk in the finance and insurance sectors," Journal of Financial Economics, Elsevier, vol. 104(3), pages 535-559.
    2. Segovia-Gonzalez, M.M. & Guerrero, F.M. & Herranz, P., 2009. "Explaining functional principal component analysis to actuarial science with an example on vehicle insurance," Insurance: Mathematics and Economics, Elsevier, vol. 45(2), pages 278-285, October.
    3. Dan Armeanu & Leonard Lache, 2008. "Application of the Model of Principal Components Analysis on Romanian Insurance Market," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 6(6(523)), pages 11-20, June.
    4. Lee, Chien-Chiang & Chang, Chi-Hung & Arouri, Mohamed & Lee, Chi-Chuan, 2016. "Economic growth and insurance development: The role of institutional environments," Economic Modelling, Elsevier, vol. 59(C), pages 361-369.
    5. Rudolf Enz, 2000. "The S-Curve Relation Between Per-Capita Income and Insurance Penetration," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 25(3), pages 396-406, July.
    6. Amir Louizi & Radhouane Kammoun, 2016. "Evaluation of corporate governance systems by credit rating agencies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 20(2), pages 363-385, June.
    7. Han, Xuehui & Khan, Haider & Zhuang, Juzhong, 2014. "Do Governance Indicators Explain Development Performance? A Cross-Country Analysis," ADB Economics Working Paper Series 417, Asian Development Bank.
    8. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2010. "The worldwide governance indicators : methodology and analytical issues," Policy Research Working Paper Series 5430, The World Bank.
    9. Aiyesha Dey, 2008. "Corporate Governance and Agency Conflicts," Journal of Accounting Research, Wiley Blackwell, vol. 46(5), pages 1143-1181, December.
    10. Dedu, Vasile & Armeanu, Daniel & Enciu, Adrian, 2009. "Using the Multivariate Data Analysis Techniques on the Insurance Market," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 170-179, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lee, Chien-Chiang & Chang, Chi-Hung, 2015. "Financial policy and insurance development: Do financial reforms matter and how?," International Review of Economics & Finance, Elsevier, vol. 38(C), pages 258-278.
    2. Greg Niehaus & Jannes Rauch & Sabine Wende, 2019. "Regulation and the connectedness of insurers to the banking sector: International evidence," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 22(4), pages 393-420, December.
    3. Rudra P. Pradhan & Saurav Dash & Rana Pratap Maradana & Manju Jayakumar & Kunal Gaurav, 2017. "Insurance market density and economic growth in Eurozone countries: the granger causality approach," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 3(1), pages 1-24, December.
    4. Lee, Chien-Chiang & Chiu, Yi-Bin & Chang, Chi-Hung, 2013. "Insurance demand and country risks: A nonlinear panel data analysis," Journal of International Money and Finance, Elsevier, vol. 36(C), pages 68-85.
    5. Lee, Chi-Chuan & Lee, Chien-Chiang & Chiou, Yan-Yu, 2017. "Insurance activities, globalization, and economic growth: New methods, new evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 51(C), pages 155-170.
    6. Nathaniel Debono, "undated". "Malta’s Governance Framework: Insights from International Governance Indicators," CBM Policy Papers PP/04/2021, Central Bank of Malta.
    7. Lee, Chien-Chiang & Chang, Chi-Hung & Arouri, Mohamed & Lee, Chi-Chuan, 2016. "Economic growth and insurance development: The role of institutional environments," Economic Modelling, Elsevier, vol. 59(C), pages 361-369.
    8. Chiu-Hui Wu, 2021. "On the Moderating Effects of Country Governance on the Relationships between Corporate Governance and Firm Performance," JRFM, MDPI, vol. 14(3), pages 1-13, March.
    9. Rudra P. Pradhan, Mak B. Arvin, John H. Hall and Neville R. Norman, 2017. "Insurance Market Development and Macroeconomic Interactions in Twenty-Six Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 42(4), pages 23-57, December.
    10. Benlagha, Noureddine & Hemrit, Wael, 2020. "Internet use and insurance growth: evidence from a panel of OECD countries," Technology in Society, Elsevier, vol. 62(C).
    11. Chakraborty, Kalyan, 2020. "Development of financial market activities and economic growth: A cross-country evidence," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 60, pages 26-47.
    12. Abduraimova, Kumushoy, 2022. "Contagion and tail risk in complex financial networks," Journal of Banking & Finance, Elsevier, vol. 143(C).
    13. Shi, Huai-Long & Zhou, Wei-Xing, 2022. "Factor volatility spillover and its implications on factor premia," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).
    14. Kapeliushnikov, Rostislav & Kuznetsov, Andrei & Demina, Natalia & Kuznetsova, Olga, 2013. "Threats to security of property rights in a transition economy: An empirical perspective," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 245-264.
    15. Chang, Carolyn W. & Li, Xiaodan & Lin, Edward M.H. & Yu, Min-Teh, 2018. "Systemic risk, interconnectedness, and non-core activities in Taiwan insurance industry," International Review of Economics & Finance, Elsevier, vol. 55(C), pages 273-284.
    16. Gerardo Manzo & Antonio Picca, 2020. "The Impact of Sovereign Shocks," Management Science, INFORMS, vol. 66(7), pages 3113-3132, July.
    17. Rakesh Sambharya & Martina Musteen, 2014. "Institutional environment and entrepreneurship: An empirical study across countries," Journal of International Entrepreneurship, Springer, vol. 12(4), pages 314-330, December.
    18. Kumar, Sanjesh & Singh, Baljeet, 2019. "Barriers to the international diffusion of technological innovations," Economic Modelling, Elsevier, vol. 82(C), pages 74-86.
    19. Myint Moe Chit, 2018. "Political openness and the growth of small and medium enterprises: empirical evidence from transition economies," Empirical Economics, Springer, vol. 55(2), pages 781-804, September.
    20. Haichao Fan & Xiang Gao, 2017. "Domestic Creditor Rights and External Private Debt," Economic Journal, Royal Economic Society, vol. 127(606), pages 2410-2440, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hur:ijarbs:v:6:y:2016:i:10:p:381-391. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hassan Danial Aslam (email available below). General contact details of provider: http://hrmars.com/index.php/pages/detail/IJARBSS .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.