Financial sector reforms and private investment in Malawi: an ARDL-bounds testing approach

PurposeThis paper analyses the relationship between financial sector development (FSD) and life insurance inclusion in India during the period from 1971–1972 to 2016–2017. The study analyses the effect of financial deepening on life insurance inclusion in India.Design/methodology/approachThe study employs augmented Dickey–Fuller (ADF) unit roots test to check the stationarity properties of the time series data. It estimates a life insurance inclusion model using the auto-regressive distributed lag model (ARDL) bounds testing approach to cointegration.FindingsThe study finds evidence of a cointegrating relationship between financial deepening and life insurance inclusion in India. A significant error correction coefficient indicates automatic adjustments to short-run disequilibrium, reinforcing the cointegrating relationship between financial sector and life insurance inclusion.Research limitations/implicationsA major limitation of the study is that it excludes the first-time sum assured (FSA) contributed by the private sector life insurance companies due to lack of data availability.Practical implicationsThe results of the study call for faster expansion of the financial sector and provision of a low interest rate regime in the Indian economy. The study invokes the need for sufficient training to the personnel in the banking and non-banking institutions to cater to the complex needs of life insurance buyers.Originality/valueThe paper estimates the link between FSD and life insurance inclusion and introduces a new measure of life insurance demand, the life insurance inclusion, measured using the FSA.

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Public and private investment and economic growth in Malawi: an ARDL-bounds testing approach

Economic Research-Ekonomska Istraživanja ◽

10.1080/1331677x.2019.1578677 ◽

2019 ◽

Vol 32 (1) ◽

pp. 673-689 ◽

Cited By ~ 1

Author(s):

Garikai Makuyana ◽

Nicholas M. Odhiambo

Keyword(s):

Economic Growth ◽

Private Investment ◽

Bounds Testing ◽

Public And Private ◽

Ardl Bounds Testing ◽

Bounds Testing Approach ◽

Testing Approach ◽

Ardl Bounds Testing Approach

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An ARDL Bounds Testing Approach to the Relationship between Financial Development and Output Growth in Nepal

PYC Nepal Journal of Management ◽

10.3126/pycnjm.v11i1.35914 ◽

2018 ◽

Vol 11 (1) ◽

pp. 5-20

Author(s):

Surya Bahadur Rana

Keyword(s):

Financial Development ◽

Financial Sector ◽

Output Growth ◽

Bounds Testing ◽

Long Run ◽

Ardl Bounds Testing ◽

Bounds Testing Approach ◽

Testing Approach ◽

The Relationship ◽

Ardl Bounds Testing Approach

This paper examines the relationship between financial development and output growth in Nepal over 42 years of period from mid- July 1975 to 2017 using ARDL bounds testing approach to co-integration. The study uses natural logarithm of per capita real GDP as a proxy of output growth and means removal average of broad money (M2) to GDP ratio and domestic private credit to GDP ratio as a proxy of financial development indicator. The results of ARDL bounds test show that financial development and output growth in Nepal is co-integrated over the study period. The study results demonstrate that financial development in Nepal leads to output growth in the long-run. However, the study fails to detect any impact of financial development on output growth in Nepal over the short-run. Based on long run results of this study, it can be concluded that development of financial sector in Nepal can stimulate long-run output growth. Thus, considerable efforts should be paid on promoting the development of the financial sector that contributes significantly to achieve long-run output growth.

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