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Greenfield foreign direct investments and insurance market diversification: a cross-country analysis

Author

Listed:
  • Bojan Srbinoski

    (University St. Kliment Ohridski)

  • Klime Poposki

    (University St. Kliment Ohridski)

  • W. Jean Kwon

    (St. John’s University)

  • Ksenija Dencic-Mihajlov

    (University of Niš)

Abstract

Foreign direct investments (FDIs) influence insurance markets directly, through foreign insurers’ participation in domestic markets, and indirectly, through cross-sectoral spillover effects. This article focuses on the indirect effects and examines the relationship between greenfield FDIs and diversification in European insurance markets. Using panel data of 28 countries for the period 2004–2019, we find that greenfield FDIs induce greater diversification of insurance markets. Our results suggest a non-linear relationship and potential mediating effects of financial development on the FDI–insurance relationship. Robustness tests using different measures of market diversification, model specifications and averaging of the data show consistent results.

Suggested Citation

  • Bojan Srbinoski & Klime Poposki & W. Jean Kwon & Ksenija Dencic-Mihajlov, 2024. "Greenfield foreign direct investments and insurance market diversification: a cross-country analysis," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 49(3), pages 636-661, July.
    • Handle: RePEc:pal:gpprii:v:49:y:2024:i:3:d:10.1057_s41288-023-00301-0
    DOI: 10.1057/s41288-023-00301-0
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