Insurance and Globalization in Developing 8 Countries (D-8): Bootstrap Panel Granger Causality Test

This study investigates the causal linkages between insurance and globalizationin Developing 8 countries (D8) by focusing on country-specific analysis over the period 1999–2011. To this end, we use insurance penetration rate (as a proxy insurance activities), globalization index KOF (as a proxy of globalization) and economic growth (as a control variable) as research variables. We apply the panel causality test provided by Konya (2006). This method is based on the Seemingly Unrelated Regressions (SUR) model and Wald tests with the country-specific bootstrap critical values. The findings indicate bidirectional causality between insurance and globalization for Malaysia and Indonesia, unidirectional causality running from the globalization to the insurance for Iran, Turkey and Bangladesh and lack of causality between the insurance and the globalization for Nigeria, Egypt and Pakistan. Accordingly, we can say that the causality between insurance and globalization are not the same in the D8 members, with regard to their particular circumstances.