Journal of
Economics and International Finance

  • Abbreviation: J. Econ. Int. Finance
  • Language: English
  • ISSN: 2006-9812
  • DOI: 10.5897/JEIF
  • Start Year: 2009
  • Published Articles: 348

Full Length Research Paper

The impact of insurance contributions on economic growth in Nigeria

Mojekwu, J. N1*, Agwuegbo, S. O. N2 and Olowokudejo, F. F1.
  1Department of Actuarial Science and Insurance, University of Lagos, Lagos State, Nigeria. 2Department of Statistics, University of Agriculture, Abeokuta, Nigeria.
Email: [email protected]

  •  Accepted: 13 June 2011
  •  Published: 31 July 2011

Abstract

 

In the last decade, most studies on the interaction between the financial sector and economic growth has focused mainly on the banks and the stock market. Recently, growing attention has shifted to the interaction between the non-bank financial intermediaries (NBFIs) such as the insurance companies and economic growth. In this study, we examined the impact of insurance contributions on economic growth in Nigeria over a twenty seven year period, between 1981 and 2008 using a dynamic factor model. The proposed technique described a number of methods designed to analyze a functional relationship between the volume of insurance contribution and economic growth in terms of underlying but unobservable random quantities called factors. The factor loadings indicate which common trend is related to which set of time series. The result obtained through this approach shows that the functional relationship between the volume of insurance contribution and economic growth in Nigeria is a first order vector autoregressive model.

 

Key words: Insurance contribution, dynamic factor model, economic growth.

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