Modeling and Inference of Insurance Sector Development on Nigeria Economic Growth
Article Sidebar
Page Numbers:
249-263
Digital Object Identifier:
10.58578/amjsai.v1i1.3534
Viewed: 317 times
Downloaded: 207 times
LYAS Publisher cordially invites qualified professionals to serve as Editors or Reviewers. Your expertise will make an important contribution to maintaining and strengthening the academic quality of our publications. Interested applicants are kindly requested to complete the application form at the following link: Editors & Reviewers
Please feel free to contact us if you need any further information about the submission process or if you have any additional questions.
Authors:
Danjuma Idi1, Mathew Stephen2 
Copyright :
Authors retain copyright and grant the journal right of first publication.
Main Article Content
Abstract
This empirical study investigated the impact of insurance sector development on economic growth in Nigeria, covering the period 1999-2022. Utilizing statistical techniques, including Augmented Dickey-Fuller (ADF) tests, regression modeling, Lagrange multiplier (LM) tests, and the Breusch-Pagan-Godfrey test for heteroskedasticity, the study revealed critical insights into the dynamic relationship between insurance sector and economic performance. The ADF test results indicated that the data series were stationary after differencing, confirming an integrated order of one (I(1)). The regression analysis revealed a statistically significant positive impact of total insurance investment (TII) on economic growth in Nigeria, with a coefficient estimate of 0.753 (p < 0.01). Conversely, no significant relationship was found between total claims paid by insurance companies and economic growth in Nigeria, with a coefficient estimate of 0.033 (p > 0.05).Diagnostic tests revealed no evidence of serial correlation in residuals at lag 1, indicating no systematic pattern, and no significant heteroskedasticity was detected, signifying no systematic variance in residuals with changes in independent variables. Based on these findings, the study recommends that policymakers prioritize implementing measures to enhance the regulatory environment and promote innovation within the insurance industry, among other policy implications.
Downloads
Article Details
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
References
Bayar, Y., Dan Gavriletea, M., & Danuletiu, D. C. (2021). Does the insurance sector really matter for economic growth? Evidence from Central and Eastern European countries. Journal of Business Economics and Management, 22(3), 695-713. https://doi.org/10.3846/jbem.2021.14287
Brainard, L., & Schwartz, B. L. (2008). What is the role of insurance in economic development. Zurich Government and Industry Affairs, Zurich, Switzerland.
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.
Eze, 0.R., & Okoye, V., 2013. Analysis of Insurance Practices and Economics Growth: in using co-integration test and error correction model. Global Advanced Research Journal of Management and Business Studies 2(1), 063-070.
Fashagba, M. O. (2018). The impact of insurance on economic growth in Nigeria. Afro Asian Journal of Social Sciences, 9(1), 1-10.
Friedman, R. Z. (2022). Understanding Social Insurance: Risk and Value Pluralism in the Early British Welfare State. Political Research Quarterly, 75(2), 278-290.
Hussein, M. A., & Alam, S. (2019). The Role of Insurance Sector in the Development of the Economy of Oman. Global Journal of Economics & Business, 6(2). 356- 364.
Lee, H., Zhen-Jiang, Y. O. N. G., & Qiao-Ming, L. I. M. (2022). Insurance development and economic growth. Financial Statistical Journal, 5(1).
Makwe, E. U., Ibechiole, O. C., & Obiaga, J. C. (2021). Insurance Sector Development and Economic Growth in Nigeria. International Journal of Multidisciplinary Research and Analysis. 04(07), 986-998
Mishkin, F. S., & Eakins, S. G. (2012). Financial markets and institutions. Pearson Education India.
Musurmanovich S. K. (2020). The Impact of Insurance on Economic Growth. International Journal of Economics, Commerce and Management, 8(12), 512-525
Ogbeide, S. O., Adu, T. O., Fapohunda, F. M., & Obadeyi, J. (2022). Insurance Sector Development and Economic Growth: Empirical Analysis from Nigeria. Asian Journal of Economics, Business and Accounting, 22(17), 55-72.
Peleckienė V., Peleckis K., Dudzevičiūtė G. & Peleckis K. K. (2019) The relationship between insurance and economic growth: evidence from the European Union countries, Economic Research-Ekonomska Istraživanja, 32(1), 1138-1151
Skipper, H. D. (1997). Foreign insurers in emerging markets: Issues and concerns (Vol. 1). Washington, DC: International Insurance Foundation.
Ukpong, M. S., & Acha, I. A. (2017). Insurance And Economic Development In Nigeria: Co-Integration And Causality Analysis. Scholedge International Journal of Management & Development, 4(4).
Zekaj, S. B., & Rexhepi, A. A. (2022). The Insurance Industry As Part Of The Economic Course. Journal of Positive School Psychology, 7225-7235.