Explaining the Role of Insurance in Developing Financial Institutions and Economic Growth in Selected Countries Using Dynamic panel Data Regression Methods and Generalized Momentum Estimation (GMM)

One of the key factors of countries’ planning in order to reach a stable long-term economic growth is existence of a proper financial market. Based on economic literature, efficient financial markets can positively affected economic growth of a nation. Furthermore, investigation of effects of insurance which under a favorable financial market can make a direct and indirect influences on economic growth is mainly crucial for scholars. The main purpose of this study is to find out the effects of insurance and financial Structure on economic growth of 40 selected countries using a panel data approach over the period of 2000-2012. The results revealed that financial structure in some cases has significant effect, while in a number of cases, it shows insignificant impact. Also, the financial development index has a negligible negative effect on the economic growth of advanced countries and in the same way, this variable in MENA countries has a negative impact on economic growth. Moreover, this variable has various coefficients in several groups of countries. Furthermore, the findings depicted a positive significant effect of insurance on economic growth in advanced economies, while it negatively affects the economic growth in American nations.