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{"id":18370,"date":"2023-05-31T10:02:26","date_gmt":"2023-05-31T07:02:26","guid":{"rendered":"https:\/\/modecon.mnau.edu.ua\/?p=18370"},"modified":"2023-05-31T10:02:26","modified_gmt":"2023-05-31T07:02:26","slug":"economic-growth-and-the-insurance","status":"publish","type":"post","link":"https:\/\/modecon.mnau.edu.ua\/en\/economic-growth-and-the-insurance\/","title":{"rendered":"Makeleni M., Sheefeni J.P.S. Economic growth and the insurance sector in South Africa: Toda-Yamamoto"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text]<\/p>\n\n\n\n
JEL Classification<\/strong>: G2; G22; G23
\n<\/span><\/td>\n		DOI<\/b>: https:\/\/doi.org\/10.31521\/modecon.V38(2023)-12<\/a><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

[\/vc_column_text][vc_column_text]Makeleni<\/strong> M., <\/strong>Economics PhD candidate, Lecturer, Department of Economics, University of the Western Cape, Cape Town, South Africa<\/p>\n

ORCID ID:<\/strong> 0000-0002-7132-6935<\/a>
\ne-mail: <\/strong>mmakeleni@uwc.ac.za<\/a><\/p>\n

Sheefeni J.P.S., <\/strong>Doctor of Economics, Associate professor of the Department, Department of Economics, University of the Western Cape, Cape Town, South Africa<\/p>\n

ORCID ID:<\/strong> 0000-0001-7260-7811<\/a>
\ne-mail: <\/strong>jsheefeni@uwc.ac.za<\/a><\/p>\n

 <\/p>\n

Economic Growth and the Insurance Sector in South Africa: Toda-Yamamoto<\/strong><\/h2>\n

\u00a0\u00a0<\/strong><\/p>\n

Abstract. Introduction<\/strong>. The connection between the real economy and the financial sector continues to be a subject of debate amongst scholars. There is a plethora of studies dedicated to unravelling the relationship between economic activity and financial progress. However, a large share of those studies has concentrated on banking and the capital market industries; the studies that have undertaken to decipher the connection between the insurance industry and prosperity in the economy are insufficient.<\/p>\n

Purpose.<\/strong> This study attempts to explore the link between South Africa’s insurance industry and economic growth. The study made use of secondary time-series quarterly data and employed the Toda-Yamamoto (non-Granger causality) test.<\/p>\n

Results.<\/strong> Firstly, the findings show a uni-directional causal relationship running from long-term insurance to GDP per-capita. Implying that the South African long-term insurance sector is supply-leading. Secondly, the results revealed that GDP per-capita and the short-term insurance sector are interdependent (bi-directional relationship). Lastly, the findings showed a uni-directional causal relationship between GDP per-capita and total insurance assets.<\/p>\n

Conclusions.<\/strong> The results imply that the South African total insurance sector is supply-leading.<\/p>\n

Keywords:<\/strong> Economic growth, Insurance, ARDL, Cointegration, Toda-Yamamoto ausality.<\/p>\n

References:<\/strong><\/p>\n

    \n
  1. Alhassan, A. L. & Fiador, V. (2014). Insurance-growth nexus in Ghana: An autoregressive distributed lag bounds cointegration approach. Review of Development Finance, <\/em>4(1), 83 – 96. DOI: https:\/\/doi.org\/10.1016\/j.rdf.2014.05.003 [in English].<\/li>\n
  2. Arena, M. (2008). Does insurance market activity promote economic growth? A cross-country study for industrialized and developing countries. The Journal of Risk and Insurance, <\/em>75(4), 921-946. DOI: https:\/\/doi.org\/10.1111\/j.1539-6975.2008.00291.x [in English].<\/li>\n
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  6. Pagano, M. (1993). Financial markets and growth: An overview. European Economic Review, <\/em>37(2-3), 613-622. DOI: https:\/\/doi.org\/10.1016\/0014-2921(93)90051-B [in English].<\/li>\n
  7. Patrick, H. T. (1966). Financial development and economic growth in underdeveloped countries. Economic Development and Cultural Change, <\/em>14(1), 174-189. DOI: http:\/\/dx.doi.org\/10.1086\/450153 [in English].<\/li>\n
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  10. Sibindi, A. B. (2014). Life insurance, financial development and economic growth in South Africa. Risk governance & control: financial markets & institutions, <\/em>4(3), 7-15. DOI: http:\/\/dx.doi.org\/10.22495\/rgcv4i3art1 [in English].<\/li>\n
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  13. Skipper, H. D. (1997). Foreign Insurers in Emerging Markets: Issues and Concerns. International Insurance Foundation<\/em>. Retrieved from : http:\/\/rmictr.gsu.edu\/Papers\/FOREIGN.pdf [in English].<\/li>\n
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  16. Umar, M. B., Dayyabu, S., Gambo, A. U., Danlami, M. R., & Ahmad, A. U. (2015). An Empirical Study on the Relationship between Financial Intermediaries and Economic Growth in Nigeria : A Cointegration and Causality Analysis. IOSR Journal of Economics and Finance, <\/em>6(4), 15-31. DOI: http:\/\/dx.doi.org\/10.9790\/5933-06431531 [in English].<\/li>\n
  17. (1964). First session of the United Nations Conference on Trade and Development (UNCTAD I).<\/em> Retrieved from : UNCTAD : https:\/\/unctad.org\/meeting\/first-session-united-nations-conference-trade-and-development-unctad-i [in English].<\/li>\n<\/ol>\n

    [\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]Received:<\/strong> 02 April 2023<\/p>\n

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    Makeleni M., Sheefeni J.P.S. (2023). Economic growth and the insurance sector in South Africa: Toda-Yamamoto. Modern Economics, 38(2023), 76-83. DOI: https:\/\/doi.org\/10.31521\/modecon.V38(2023)-12.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
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    [vc_row][vc_column][vc_column_text] JEL Classification: G2; G22; G23 DOI: https:\/\/doi.org\/10.31521\/modecon.V38(2023)-12 [\/vc_column_text][vc_column_text]Makeleni M., Economics PhD candidate, Lecturer, Department of Economics, University of the Western Cape, Cape Town, South Africa ORCID ID: 0000-0002-7132-6935 e-mail: mmakeleni@uwc.ac.za Sheefeni J.P.S., Doctor of Economics, Associate professor of the Department, Department of Economics, University of the Western Cape, Cape Town, South Africa ORCID ID:
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