Browse > Article
http://dx.doi.org/10.13106/jafeb.2022.vol9.no2.0141

Legal Stability and Determinants of Insurance Development in the Middle East and North Africa Region (MENA)  

BEN DHIAB, Lassad (Department of Finance, College of Business Administration, Northern Border University)
DKHILI, Hichem (Department of Accounting, College of Business Administration, Northern Border University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.9, no.2, 2022 , pp. 141-149 More about this Journal
Abstract
Despite the importance of the insurance business for financial and economic development, few studies have looked at the factors that influence its growth. This research adds to the body of knowledge by empirically examining the impact of numerous factors on the development of the insurance business in 15 Middle East and North African (MENA) countries from 2000 to 2017. The study looks at macroeconomic, demographic, and institutional factors as potential drivers of the insurance industry's growth, with the insurance premium as a percentage of GDP as the dependent variable. All variables are stationary at the first difference, according to the IPS panel unit root test. The Pedroni residual cointegration test, Kao residual cointegration test, and Johansen-Fisher panel cointegration tests are then used to look for long-run associations. The cointegration tests strongly suggest that the insurance premium and the various variables have long-run correlations. Findings from the Fully-Modified OLS imply that GDP per capita, gross capital formation, and the KOF economic globalization index have a positive long-term impact on the insurance business. The insurance business is also driven by combating corruption and the rule of law. The population and regulatory quality, on the other hand, have no significant impact.
Keywords
Insurance; Institutions; Macroeconomy; Middle East and North Africa; Cointegration;
Citations & Related Records
Times Cited By KSCI : 6  (Citation Analysis)
연도 인용수 순위
1 Lee, H. S., Chong, S. C., & Sia, B. K. (2018b). Influence of secondary and tertiary literacy on life insurance consumption: Case of selected ASEAN countries. The Geneva Papers on Risk and Insurance-Issues and Practice, 43(1), 1-15. http://doi.org/10.1057%2Fs41288-017-0050-7   DOI
2 Lee, H. S., Chong, S. C., Yap, S., Sia, B. K., & Chen, Y. X. (2021). Does economic freedom in host countries lead to increased non-life insurance development? Sage Open, 11(4), 1-18. https://doi.org/10.1177/21582440211054486   DOI
3 Millo, G., & Carmeci, G. (2011). Non-life insurance consumption in Italy: A sub-regional panel data analysis. Journal of Geographical Systems, 13(3), 273-298. https://doi.org/10.1111/jori.12023   DOI
4 Pedroni, P. (1999). Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics, 61(S1), 653-670. https://doi.org/10.1111/1468-0084.0610s1653   DOI
5 Pedroni, P. (2004). Panel cointegration: asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econometric Theory, 20(3), 597-625. https://doi.org/10.1017/S0266466604203073   DOI
6 Kao, C. (1999). Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics, 90(1), 1-44. https://doi.org/10.1016/S0304-4076(98)00023-2   DOI
7 Lee, H. S., Cheng, F. F., Chong, S. C., & Sia, B. K. (2018a). Influence of macroeconomics factors and legal stability to insurance growth in the ASEAN-5 Countries. Jurnal Ekonomi Malaysia, 52(2), 219-229. http://doi.org/10.17576/JEM-2018-5202-18   DOI
8 Levine, R., & Zervos, S. (1998). Stock markets, banks, and economic growth. American Economic Review, 88(3), 537-558. https://www.jstor.org/stable/116848
9 Nguyen, P. T., & Pham, T. T. T. (2021). The impact of financial development on economic growth: Empirical evidence from transitional economies. Journal of Asian Finance, Economics and Business, 8(11), 191-201. https://doi.org/10.13106/jafeb.2021.vol8.no11.0191   DOI
10 Peleckiene, V., Peleckis, M., Dudzeviciute, G., & Peleckis, K. (2019). The relationship between insurance and economic growth: Evidence from the European Union countries. Economic Research, 32(1), 1138-1151. https://doi.org/10.1080/1331677X.2019.1588765   DOI
11 Sasidharan, S., Ranjith, V., & Prabhuram, S. (2020). Micro-and macro-level factors determining the financial performance of UAE insurance companies. Journal of Asian Finance, Economics and Business, 7(12), 909-917. https://doi.org/10.13106/jafeb.2020.vol7.no12.909   DOI
12 Guerineau S., & Sawadogo R. (2015). On the determinants of life insurance development in SubSaharan Africa: the role of the institutions quality in the effect of economic development. https://halshs.archives-ouvertes.fr/halshs-01178838/document
13 Brokesova, Z., & Vachalkova, I. (2016). Macroeconomic environment and insurance industry development: The case of Visegrad group countries. Ekonomicka revue - Central European Review of Economic Issues, 19, 63-72. https://doi.org/10.7327/CEREI.2016.06.03   DOI
14 Zerriaa, M., & Noubbigh, H. (2016). Determinants of life insurance demand in the MENA region. The Geneva Papers on Risk and Insurance-Issues and Practice, 41(3), 491-511. https://doi.org/10.1057%2Fgpp.2016.1   DOI
15 Maddala, G. S., & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics, 61(S1), 631-652. https://doi.org/10.1111/1468-0084.0610s1631   DOI
16 Alqirem, R., Abu Afifa, M., Saleh, I., & Haniah, F. (2020). Ownership structure, earnings manipulation, and organizational performance: The case of Jordanian insurance organizations. Journal of Asian Finance, Economics and Business, 7(12), 293-308. https://doi.org/10.13106/jafeb.2020.vol7.no12.293   DOI
17 Beck, T., & Webb, I. (2003). Economic, demographic, and institutional determinants of life insurance consumption across countries. The World Bank Economic Review, 17(1), 51-88. http://hdl.handle.net/10986/17169   DOI
18 Ben Dhiab, L. (2021). Determinants of Insurance Firms' Profitability: An Empirical Study of Saudi Insurance Market. Journal of Asian Finance, Economics and Business, 8(6), 235-243. https://doi.org10.13106/jafeb.2021.vol8.no6.0235   DOI
19 Benziane, D., & Shah, Q. (2019). Insurance consumption in the Maghreb countries (Algeria, Morocco, and Tunisia): Financial and institutional determinants. Theoretical & Applied Economics, 3(620), 193-204. http://store.ectap.ro/articole/1414.pdf
20 Gaganis, C., Hasan, I., & Pasiouras, F. (2020). Cross-country evidence on the relationship between regulations and the development of the life insurance sector. Economic Modelling, 89, 256-272. http://urn.fi/URN:NBN:fi:bof-202002181125   DOI
21 Zerriaa, M., Amiri, M. M., Noubbigh, H., & Naoui, K. (2017). Determinants of life insurance demand in Tunisia. African Development Review, 29(1), 69-80. https://doi.org/10.1111/1467-8268.12239   DOI
22 Zyka, E., & Myftaraj, E. (2014). Factors affecting the insurance sector development: Evidence from Albania. The Romanian Economic Journal, 51, 171-188. http://www.rejournal.eu/sites/rejournal.versatech.ro/files/articole/2014-03-01/1898/8zyka.pdf
23 Hwang, T., & Gao, S. (2003). The determinants of the demand for life insurance in an emerging economy-the case of China. Managerial Finance, 29(5/6), 82-96. https://doi.org/10.1108/03074350310768779   DOI
24 Feyen, E., Lester, R. R., & Rocha, R. D. R. (2013). What drives the development of the insurance sector? An empirical analysis based on a panel of developed and developing countries. The Journal of Financial Perspectives, 1(1), 1-23. https://doi.org/10.1596/1813-9450-5572   DOI
25 Phillips, P. C. (1995). Fully modified least squares and vector autoregression. Econometrica: Journal of the Econometric Society, 63(5), 1023-1078. https://doi.org/10.2307/2171721   DOI
26 Phillips, P. C., & Hansen, B. E. (1990). Statistical inference in instrumental variables regression with I (1) processes. The Review of Economic Studies, 57(1), 99-125. https://doi.org/10.2307/2297545   DOI
27 Ul Din, S. M., Abu-Bakar, A., & Regupathi, A. (2017). Does insurance promote economic growth: A comparative study of developed and emerging/developing economies. Cogent Economics & Finance, 5(1), 1390029. https://doi.org/10.1080/23322039.2017.1390029   DOI
28 Ward, D., & Zurbruegg, R. (2000). Does insurance promote economic growth? Evidence from OECD countries. Journal of Risk and Insurance, 67(4), 489-506. https://doi.org/10.2307/253847   DOI