Gengnan Chiang and Chin-Chi Liu

Correspondence: Chin-Chi Liu, liueric1213@gmail.com

Department of Finance, Ling Tung University, Taiwan

pdf (1400.23 Kb) | doi: https://doi.org/10.47260/bae/7211

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.

Keywords:

  Regulatory quality, Life insurance development, Economic growth, Nonlinear panel smooth transition regression (PSTR) model.

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