Insurance Policy Thresholds for Economic Growth in Africa

Asongu, Simplice A.; Odhiambo, Nicholas M.

doi:10.1057/s41287-019-00234-2

Cited by 93 publications

(48 citation statements)

References 57 publications

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“…In the light of the above, external flows must be increased to a certain benchmark before positive outcomes on inclusive human development can be expected. The use of interactive regressions to capture such non-linear effects is consistent with recent literature, notably, on: increasing information and communication technology for inclusive human development (Asongu and le Roux 2017); enhancing information technology for inequality mitigation (Asongu and Odhiambo 2019b) and increasing insurance penetration for economic growth (Asongu and Odhiambo 2019c).…”

Section: Intuition Theoretical Underpinnings and Hypothesis Developmentsupporting

confidence: 76%

Thresholds of External Flows for Inclusive Human Development in Sub-Saharan Africa

Asongu

Uduji

Okolo‐Obasi

2019

Int. Journal of Com. WB

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This research investigates the incidence of enhancing external flows on inclusive human development in a panel of 48 countries in sub-Saharan Africa. It complements the literature by examining the relevance of enhancing three types of external flows, namely: development assistance, foreign investment and remittances. Ordinary Least Squares, Tobit, Fixed effects, Generalised Method of Moments and Quantile regressions are used as empirical strategies. The following main results are apparent: (i) between 60 and 150 (% of GDP) is the threshold of foreign aid; (ii) 33.333 (% of GDP) is the foreign investment threshold and (iii) 25 (% of GDP) is the critical mass of remittances. At the established critical masses or thresholds, external flows start having positive effects on inclusive human development. Countries characterized by inclusive development levels that are low need more investment in foreign aid for inclusive human development compared to their counterparts characterized by inclusive human development levels that are high.

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Section: Intuition Theoretical Underpinnings and Hypothesis Developmentsupporting

confidence: 76%

Thresholds of External Flows for Inclusive Human Development in Sub-Saharan Africa

Asongu

Uduji

Okolo‐Obasi

2019

Int. Journal of Com. WB

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“…In order for the established thresholds to make economic sense and have policy relevance, they should be within the statistical range (i.e. minimum to maximum) disclosed in the summary statistics (Asongu & Odhiambo, 2019c). Moreover, in accordance with recent threshold literature, when increasing policy variables beyond critical masses or thresholds engenders undesired macroeconomic effects, it is an indication that the policy variables should be complemented with other policy initiatives in order to facilitate desired or favourable outcomes on the dependent variables (Asongu & Odhiambo, 2019d).…”

Section: Net Effect Decompositionmentioning

confidence: 99%

Foreign Direct Investment, Information Technology and Economic Growth Dynamics in Sub-Saharan Africa

Asongu

Odhiambo

2019

SSRN Journal

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The research assesses how information and communication technology (ICT) modulates the effect of foreign direct investment (FDI) on economic growth dynamics in 25 countries in Sub-Saharan Africa for the period 1980-2014. The employed economic growth dynamics areGross Domestic Product (GDP) growth, real GDP and GDP per capita while ICT is measured by mobile phone penetration and internet penetration. The empirical evidence is based on the Generalised Method of Moments. The study finds that both internet penetration and mobile phone penetration overwhelmingly modulate FDI to induce overall positive net effects on all three economic growth dynamics. Moreover, the positive net effects are consistently more apparent in internet-centric regressions compared to "mobile phone"-oriented specifications. In the light of negative interactive effects, net effects are decomposed to provide thresholds at which ICT policy variables should be complemented with other policy initiatives in order to engender favorable outcomes on economic growth dynamics. Practical and theoretical implications are discussed.

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“…Third, as expanded in section 2, the bulk of the literature on insurance penetration in Africa has focused on two main strands, notably: (1) connections between insurance penetration and development outcomes (Ioncică et al, 2012;Akinlo, 2015;Alhassan & Biekpe, 2015Asongu & Odhiambo, 2020a); and (2) determinants of insurance penetration (Zerriaa et al, 2017;Guerineau & Sawadogo, 2015;Alhassan & Biekpe, 2016b;Asongu & Odhiambo, 2020b). This research extends the former strand of the literature by investigating the relevance of enhancing insurance on inequality because of an apparent gap in the inequality literature.…”

Section: Introductionmentioning

confidence: 99%

Insurance and inequality in Sub‐Saharan Africa: policy thresholds

Asongu¹,

Odhiambo²

2019

Int Social Sci J

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In this study, we examine how insurance affects income inequality in sub-Saharan Africa, using data from 42 countries during the period 2004-2014. Three inequality variables are used, namely: the Gini coefficient, the Atkinson index and the Palma ratio. Two insurance premiums are employed, namely: life insurance and non-life insurance. The empirical evidence is based on the Generalized Method of Moments (GMM). Life insurance increases the Gini coefficient and increasing life insurance has a net positive effect on the Gini coefficient and the Atkinson index. Non-life insurance reduces the Gini coefficient and increasing non-life insurance has a net positive effect on the Palma ratio. The analysis is extended to establish policy thresholds at which increasing insurance premiums completely dampen the net positive effects. From the extended analysis, 7.500 of life insurance premiums (% of GDP) is the critical mass required for life insurance to negatively affect inequality, while 0.855 of non-life insurance premiums (% of GDP) is the threshold required for non-life insurance to negatively affect inequality. Policy thresholds are provided at which insurance penetration decreases income inequality in sub-Saharan Africa.

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Insurance Policy Thresholds for Economic Growth in Africa

Cited by 93 publications

References 57 publications

Thresholds of External Flows for Inclusive Human Development in Sub-Saharan Africa

Thresholds of External Flows for Inclusive Human Development in Sub-Saharan Africa

Foreign Direct Investment, Information Technology and Economic Growth Dynamics in Sub-Saharan Africa

Insurance and inequality in Sub‐Saharan Africa: policy thresholds

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