Globalisation and Convergence of International Life Insurance Markets

Abstract

Using panel data of 39 countries over the period 1979-2007, this paper is the first to empirically examine the influence of the KOF index of globalisation (overall and its three main sub-indices) on the development and convergence of international life insurance markets by a panel cointegration technique. We find that globalisation has a significant impact on the development of international life insurance markets and on reducing the deviation between individual countries' life insurance penetration and the world average. Economic and social dimensions exert a similar effect as well, and the effect of economic globalisation is higher, while the effect of political dimension is not significant. In addition, social globalisation plays a dominant role on the interactive influence of different dimensions of globalisation, implying that socio-cultural factors are a latent factor behind economic or political influence. Finally, most countries' structural breaks coincide with the fast growth wave of international life insurance markets.

Asymmetric effects of investor sentiment on industry stock returns: Panel data evidence

“…Furthermore, they pinpoint that more can be learned about asset pricing by focusing on both linear and nonlinear relationships. Obstfeld and Taylor (1997), and Lee and Chang (2012) explain the nonlinear adjustment process of asset prices using threshold models. Hansen (1999) argues that the threshold model specifies that individual observations can be divided into classes based on the value of an observed variable.…”

How Does Diversification Impact Bank Stability? The Role of Globalization, Regulations, and Governance Environments

“…() further update the index of globalization. There is general agreement that globalization implies countries are becoming more integrated into the international economy, increasing people's interaction, information exchanges, technology transformations, and convergence in cultural activity (Dreher, ; Lee and Chang, ; Lee et al ., ). García‐Herrero and Martinez Peria () also find some evidence for cross‐border expansion into emerging market countries in which a larger share of foreign claims is extended through the local affiliates of foreign banks, allowing local firms to enjoy more stable foreign financing.…”

“…The financial statements are obtained from the Bureau Van Dijk BankScope database. Since globalization is not just an economic phenomenon, we use a multivariate approach to measure globalization (Lee and Chang, ), which is a recent index calculated by the KOF database of the Swiss Economic Institute (Konjunkturforschungsstelle). Except for an overall index of globalization that is calculated, this index also measures three main dimensions of globalization – economic, social, and political integrations – as detailed in Dreher et al .…”

Insurance Penetration and Institutional Spillover on Economic Growth: A Dynamic Spatial Econometric Approach on the Asian and Europe Region

“…Further, NL moderated by the INS total short-run impact showed negatively significant results in COC, ROL, and PSV models. It is found that both life and non-life insurance highly impact the financial sectors' economies in developed countries and not the developing ones due to a "siphon effect" at the country level since the countries with higher capacity and development would have absorbed such elements from neighbouring countries, especially when the developing countries' institutional frameworks are weak (Din et al 2017;Lee and Chang 2012).…”