ISSN: 2222-6990
Open access
This study investigated the financial sector policies and economic growth link in Nigeria with a focus more on the insurance sub-sector. The study adopted the time series research design, where data for evaluation covering the period 2010 to 2018 were obtained from several editions of the Central Bank of Nigeria (CBN) Statistical Bulletin. Gross capital formation, total insurance premium and total insurance investment were used to represent financial sector policies, while gross domestic product was used as proxy for economic growth. Data were analyzed using descriptive statistics and multiple regression technique assisted by E-views 10 software. The study found that gross capital formation and total insurance investment were significantly related to gross domestic product, while total insurance premium had insignificant effect on GDP. Also, gross capital formation and total insurance premium had negative effect on GDP, but total insurance investment was positively related to GDP. The study concluded that financial sector policies made statistically substantial contribution to the growth of the Nigerian economy with a coefficient of determination and probability of F-statistics values of 0.99246 and 0.00001 (less than 0.05 level of significance) respectively. It is therefore recommended that the regulatory authorities should put in place policies to make it attractive for Nigerians to patronize insurance business as this would translate to increased insurance investment and further result to growth of the Nigerian economy since insurance investment was found to have positive link with gross domestic product.
Adebisi, S. A., Umukoro, S. E. O., & Ohiani, A. S. (2019). Evaluating local content policy of insurance oil and gas risk portfolio as capacity building strategy for Nigeria insurance companies. Academic Journal of Economic Studies, 5(4), 69-77.
Arestis, P., & Demetriades, P. (1997). Financial development and economic growth: Assessing the evidence. The Economic Journal, 107(442), 783-799. https://doi.org/10.1111/j.1468-0297.1997.tb00043.x
Babu, G. S. (2018). Role of financial system in economic development of a country. International Journal of Multidisciplinary Research and Development, 5(8), 100-107.
Billah, M. M. (2013). Effect of Insurance on Maritime Liability Law: A Legal and Economic Analysis. Springer International Publishing.
Boon, T. K. (2005). Do commercial banks, stock market and insurance market promote economic growth? An analysis of the Singapore economy (Working Paper). Nanyang Technological University, Nanyang, Singapore, 1-15. www.ceistorvergata.it>XII_Conference>Boon Accessed 09/08/2020
Etale, L. M. (2019). Insurance sector development and economic growth in Nigeria: An empirical analysis. International Journal of Development and Economic Sustainability, 7(4), 34-48.
Etale, L. M., & Uzakah, T. (2020). Financial Accounting performance indicators and share price: A case study of Zenith Bank Nigeria PLC. Niger Delta Journal of Management Sciences, 1(1), 62-79.
Eze, O. R., & Okoye, V. (2013). Analysis of insurance practices and economic growth in Nigeria: Using co-integration test and error correction model. Global Advanced Research Journal of Management and Business Studies, 2(1), 063-070.
Fadun, O. S., & Shoyemi, O. S. (2018). Insurance investment funds and economic growth in Nigeria: An empirical analysis (2000-2015). International Journal of Development and Management Review, 13(1), 73-88.
Fashagba, M. O. (2018). The impact of insurance on economic growth in Nigeria. Afro Asian Journal of Social Sciences, IX (1), 1-10.
Gollier, C. (2003). To insure or not to insure? An insurance puzzle. The Geneva Papers on Risk and Insurance Theory, 28, 5-24.
Haiss, P., & Sumegi, K. (2008). The relationship between insurance and economic growth: A theoretical and empirical analysis. Empirica, 35(4), 405-431. https://doi.org/10.1007/s10663-006-9075-2
Horng, M., Chang, Y., & Wu, T. (2012). Does insurance demand or financial development promote economic growth? Evidence from Taiwan. Applied Economics Letters, 19(2), 105-111. https://doi.org/10.1080/13504851.2011.568386
Hou, H., & Cheng, S. (2017). The dynamic effects of banking, life insurance and stock markets on economic growth. Japan and the World Economy, 41, 87-98. https://dx.doi.org/10.1016/j.japwor.2017.02.001
Iyodo, B. Y., Samuel, S. E., & Inyada, S. J. (2018). Effect of insurance industry performance on economic growth in Nigeria. International Journal of Business and Finance Management Research, 6(2018), 22-33.
Lee, H., Yong, Z., & Lim, Q. (2018). Insurance development and economic growth. Financial Statistical Journal, 1, 1-17. https://doi.org/10.24294/fsi.v1i4.1057
Montiel, P. J. (1995). Financial policies and economic growth: Theory, evidence and country specific experiences in Sub-Saharan Africa, AERC Special Paper 18, African Economic Research Consortium, 1-42. www.idl-bnc-idrc.dspacedirect.org Accessed 09/08/2020
Nwosa, P. I., & Mustapha, Z. B. (2018). The dynamics of insurance development and economic growth in Nigeria. The India Economic Journal, 65(1/4), 37-44. https://doi.org/10.1177/0019466217727813
Nwoye, U. J., Obiorah, J. N., & Ekesiobi, C. (2015). Effect of Nigeria macroeconomic environment on the performance of the national economy: Implications. International Journal of Academic Research in Business and Social Sciences, 5(7), 42-51. https://dx.doi.org/10.6007/IJARBSS/v5-i7/1708
Olushola, O. A., & Uzoma, M. E. (2018). Financial sector development and economic growth in Nigeria: An econometric analysis, 1981-2017. International Journal of Economics and Financial Management, 3(3), 35-50.
Ouedraogo, I., Guerineau, S., & Sawadogo, R. (2018). Life insurance development and economic growth: Evidence from developing countries. Journal of Economic Development, 43(2), 1-28. https://doi.org/10.35866/caujed.2018.43.2.001
Outreville, J. F. (2013). The relationship between insurance and economic development: 85 Empirical papers for a review of the literature. Risk Management and Insurance Review, 16(1), 71-122. https://doi.org/10.1111/j.1540.6296.2012.01219.x
Peleckiene, V., Peleckis, K., Dudzeviciute, G., & Peleckis, K. K. (2019). The relationship between insurance and economic growth: Evidence from the European Union countries. Economic Research – Ekonomska Istrazivanja, 32(1), 1138-1151. https://doi.org/10.1080/1331677X.2019.1588765
Skipper, H. D. (1997). Foreign insurers in emerging markets: Issues and concerns, IIF Occasional Paper No. 1, International Insurance Foundation, 1-42. www.researchgate.net Accessed 09/08/2020
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 and Finance, 5(1), 1-12. https://doi.org/10.1080/23322039.2017.1390029
Ul Din, S. M., Regupathi, A., & Abu-Bakar, A. (2017). Insurance effect on economic growth – among economies in various phases of development. Review of International Business and Strategy, 27(4), 501-519. https://doi.org/10.1108/RIBS-02-2017-0010
Yinusa, O., & Akinlo, T. (2013). Insurance development and economic growth in Nigeria, 1986–2010. Journal of Economics and International Finance, 5(5), 218-224. https://doi.org/10.5897/JEIF2013.0498.
In-Text Citation: (Etale, and Edoumiekumo, 2020)
To Cite this Article: Etale, L. M., and Edoumiekumo, A. R. (2020). Financial Sector Policies and Economic Growth: Evidence From Insurance Sector in Nigeria. International Journal of Academic Research in Business and Social Sciences. 10(9), 155-169.
Copyright: © 2020 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode