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Culture and the demand for non‐life insurance: Empirical evidences from middle‐income and high‐income economies*
Author(s) -
Trinh Cong Tam,
Nguyen Xuan,
Sgro Pasquale
Publication year - 2021
Publication title -
economics of transition and institutional change
Language(s) - English
Resource type - Journals
eISSN - 2577-6983
pISSN - 2577-6975
DOI - 10.1111/ecot.12274
Subject(s) - prosperity , economics , life insurance , panel data , per capita income , demographic economics , economic growth , actuarial science , econometrics , demography , sociology
This paper investigates the impact of culture on non‐life insurance expenditure using a panel dataset covering 27 middle‐income countries and 40 high‐income countries in the period 1980–2014. Based on the two‐step system GMM estimator, it is found that several cultural dimensions such as masculinity, uncertainty avoidance and power distance significantly explain the spending on non‐life insurance in middle‐income countries, while masculinity is the only cultural factor that significantly explains spending on non‐life insurance in high‐income countries. Traditional drivers of the demand for non‐life insurance, such as per capita income, economic freedom and urbanization, also behave differently comparing between the two income‐based groups of countries. These findings provide useful recommendations for business firms and policymakers around the world, especially transitional economies, to promote and sustain the development of the non‐life insurance sector, which is an important engine for growth and prosperity.