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The Impact of Regulatory Quality on the Nexus between Life Insurance Development and Economic Growth: Evidence from European Developing Countries

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  • Gengnan Chiang
  • Chin-Chi Liu

Abstract

The purpose of this study is to explore whether the regulatory quality influences the relation between life insurance development and economic growth by applying a nonlinear panel smooth transition regression (PSTR) model. Using the data from Worldwide Governance Indicators (WGI) to assess the soundness of regulatory quality, this paper finds that the relationship between life insurance development and economic growth is significantly positive in the countries with relatively better regulatory quality. Our findings not only indicate that sound regulatory quality could encourage the growth effect of life insurance sectors but also have far-reaching practical implications for other economies to realize regulatory quality should matter for the development of the economic growth.

Suggested Citation

  • Gengnan Chiang & Chin-Chi Liu, 2020. "The Impact of Regulatory Quality on the Nexus between Life Insurance Development and Economic Growth: Evidence from European Developing Countries," Bulletin of Applied Economics, Risk Market Journals, vol. 7(2), pages 141-152.
    • Handle: RePEc:rmk:rmkbae:v:7:y:2020:i:2:p:141-152
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Regulatory quality; Life insurance development; Economic growth; Nonlinear panel smooth transition regression (PSTR) model.;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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