The Contribution Of China's Insurance Industry To Economic Growth: Theoretical Model And Empirical Evidence

The gross scale of insurance industry and insurance density, insurance depth have grown by high speed and got great development from the zero start, since the recover of insurance industry in 1980. At the same time as China's insurance industry has seen constant improvement and given full play to the function of compensation, financing and social management is making the relationship between insurance industry and the national economy, people's livelihood becoming increasingly close. In such a situation, a comprehensive and objective evaluation of China's insurance industry's role and contribution to the economic growth, we can make the intuitive and accurate understanding of China's insurance industry and the historical stage of development, thereby accurately predict the development of China's insurance industry trend, which will provide data support and theoretical basis for China's insurance industry policies, adjustment of insurance products, the future development of the insurance industry .Traditional methods that use to measure the contribution of insurance industry to the economic growth, such as VAR, ECM and Granger causality test, don't take the indirect contribution ,which through insurance industry's spillover effect ,and intend to underestimate its contribution ,in addition those methods can't reveal the mechanisms that how insurance industry promote economic growth . Given the shortcomings of traditional methods, in this study, we adopt the two-sector model which was first proposed by Feder, and the model based on the Aggregate Production Function, using Structural Approach to fully measure the contribution of insurance industry to the economic growth and reveal the mechanisms.This thesis concludes seven chapters: Chapter 1 Introduction, the issue to study has been put forward and the innovation and the study methods have been interpreted briefly; Chapter 2 starts with a brief review on relative literature at home and abroad and then point out the major problems in domestic empirical study of this issue; Chapter 3 starts with the analysis of the four possible channels (using endogenous growth model), through which the financial intermediation can effect the long-term economic growth, then focus on insurance industry, which is one of the three pillars of modern financial system, analyzing how the insurance industry through its three basic function and the spillover effect of three basic function promote long-term economic growth through the four channels, and before conducting empirical testing; Chapter 4 gives a brief review on china's insurance industry; Chapter 5 propose three models used for empirical test; Chapter 6 apply the models established in chapter5 to the case of china with the date from 1980 to 2006. Results shows that the contribution of insurance industry to the economic growth mainly due to the spillover effect. And the insurance industry of china is still at the elementary stage, which make the marginal productivity of insurance industry lower than real sector's; Chapter 7 on the bases of theoretical and experiential analysis, advice and suggestions on how to develop china's insurance industry and raise efficiency.