Open AccessDoes Insurance Development Affect Financial Market in Developing Countries?
Author(s) -
Relwendé Sawadogo,
Samuel Guérineau
Publication year - 2016
Publication title -
international finance and banking
Language(s) - English
Resource type - Journals
ISSN - 2374-2089
DOI - 10.5296/ifb.v3i1.9533
Subject(s) - endogeneity , stock market , business , market depth , financial market , monetary economics , economics , finance , econometrics , paleontology , horse , biology
International audienceThis paper investigates the impact of insurance on stock market development in 37developing countries over the period 1987-2011. By controlling for the potential endogeneitybias by System GMM estimator, we show that the insurance premiums significantly increasethe stock market value traded. This result is robust to the use of alternative measure of stockmarket development and control of the political and legal system quality. In addition, theresults highlight that an improvement in property rights promotes the deepening of thefinancial market. Thus, the results argue for insurance policies promoting and animprovement of the legal environment to benefit from the financial market development