UPSI Digital Repository (UDRep)
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UPSI Digital Repository (UDRep)
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| Abstract : Perpustakaan Tuanku Bainun |
| The relationship between insurance and economic growth is one of the important issues debated by economists and policy makers in both developing and developed countries. This study aims to explore this relationship through theoretical debates, empirical studies, Macroeconomic models are constructed to analyse the effects of insurance on economic growth, and the effects of insurance are affected by other variables such as inflation, government debt and government expenditure. Therefore, this study aims to determine the short-term and long-term relationship between insurance and economic growth in Malaysia and Singapore over the time horizon of 1990 to 2022 in order to fulfil three objectives. The first objective is to identify the relationship between insurance and economic growth with the selected variables in both Malaysia and Singapore, the second objective is to examine the relationship between insurance and economic with government debt variable in long-run and short- run, the third objective is objective is to examine the relationship between insurance and economic with government expenditure variable in long-run and short- run. The dynamic analysis in this research utilizes the Autoregressive Distributed Lag (ARDL) approach. Results confirm the presence of a long-term relationship for both Malaysia and Singapore in the government debt model, as well as in the government expenditure model. Short-term dynamics in the government debt model are captured by Error Correction Model (ECM) coefficients of -0.334235 for Malaysia and - 0.194263 for Singapore, highlighting Malaysia's faster adjustment to short-term shocks compared to Singapore. A similar outcome is observed on the government expenditure model, the coefficient for Malaysia is -0.382491 which is higher than Singapore, which recorded at - 0.011665. In conclusion, the findings underscore the importance of developing the insurance sector as a strategic means to enhance economic stability and growth. To accomplish this target, policymakers are encouraged to promote insurance investment to leverage its potential benefits for sustainable economic development. |
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