Financial access, governance and insurance sector development in sub-Saharan Africa
ISSN: 0144-3585
Article publication date: 26 February 2020
Issue publication date: 27 July 2020
Abstract
Purpose
This study investigates the role of financial access in moderating the effect of governance on insurance consumption in 42 sub-Saharan African countries using data for the period 2004–2014.
Design/methodology/approach
Two life insurance indicators are used, notably: life insurance and non-life insurance. Six governance measurements are also used, namely: political stability, ‘voice and accountability’, government effectiveness, regulation quality, corruption-control and the rule of law. The empirical evidence is based on the Generalised Method of Moments (GMM) and Least Squares Dummy Variable Corrected (LSDVC) estimators.
Findings
Estimations from the LSDVC are not significant while the following main findings are established from the GMM. First, financial access promotes life insurance through channels of political stability, ‘voice and accountability’, government effectiveness, the rule of law and corruption-control. Second, financial access also stimulates non-life insurance via governance mechanisms of political stability, ‘voice and accountability’, government effectiveness, regulation quality, the rule of law and corruption-control.
Originality/value
This research complements the sparse literature on insurance promotion in Africa by engaging the hitherto unexplored role of financial access through governance channels.
Keywords
Acknowledgements
The authors are indebted to the editor and reviewers for constructive comments
Citation
Asongu, S. and Odhiambo, N.M. (2020), "Financial access, governance and insurance sector development in sub-Saharan Africa", Journal of Economic Studies, Vol. 47 No. 4, pp. 849-875. https://doi.org/10.1108/JES-01-2019-0025
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited