Does Insurance Development Promote The Improvement Of Total Factor Productivity?

The insurance industry includes not only the general characteristics of finance,but also economic compensation function,risk management function and other special features.It constitutes one of the three pillars of the finance industry,the other two being banking and securities.Since China joined the World Trade Organization in 2001,the insurance industry has become the fastest growing and most complete sector in China's financial industry,and plays an indispensable role in China's national economy.After the short-term financial crisis in 2008,the economic booster and the role of social stabilizer are being reflected on more and more along with continuous innovation and development of the insurance industry.In previous studies,researchers mainly circumfused the development of the insurance industry on economic growth or the relationship between the development of insurance and economic growth.Most scholars believe that economic growth can promote the development of the insurance industry,but the development of the insurance industry doesn't work for economic growth.Choosing the growth rate of Total Factor Productivity instead of economic growth,this paper mainly studies whether the development of insurance industry can promote the improvement of the growth rate of Total Factor Productivity with provincial panel data from 1997 to 2013 in China.In order to get the research results,the author carefully read and studied more than 100 related papers.The first part of this paper is the introduction,which mainly introduces the realistic background,the research significance,the research frame,the basic content,the main research methods,the possible innovation and shortcomings in the present study.The second part summarizes the domestic and foreign existing literature from two aspects,namely,the calculation of Total Factor Productivity and the relationship between the development of insurance industry and the Total Factor Productivity.The third part explains the fact that the development of the insurance industry will increase the growth rate of Total Factor Productivity in the form of structural diagram,mainly from the diversification of risk and optimization of the investment.This part also introduced some cases of vehicle insurance and agricultural insurance,as well as the total asset,investment income and asset allocation of the insurance industry in the last four years.The fourth part explains the reason why the Malmquist-DEA method is selected for the calculation for the growth rate of Total Factor Productivity,introduces the relevant measurement model,and makes a brief provincial and regional analysis for the measured results.The fifth part is the core parts of this paper,including the selection of model,variables setting,experimental test and analysis.At first,the relevant measurement model is given,and the relevant explaining variables,explained variables and control variables are selected based on the relevant panel data 31 provinces in China from 1997 to 2013.Then we put the premium income,the insurance density and the insurance penetration as the indicators of the development of the insurance industry respectively,and use single factor analysis and multivariate analysis to validate the model.The effect of insurance development on the growth rate of Total Factor Productivity was studied by using the fixed effect model.Chapter 6 is the conclusion and policy recommendations.Results show that under the existing insurance system,The development of the insurance industry has a negative effect on the improvement of the growth rate of Total Factor Productivity.Through further analysis,the author made the following three aspects of the policy recommendations:First,China must consummate and standardize the insurance development system,to keep in mind the insurance industry's surname is insurance.The basic role of the insurance industry is insurance protection and risk diversification.The second is to perfect laws related to the use of insurance fund to ensure a reasonable capital flow.The third is to vigorously promote the development of the insurance industry and reasonably transfer household's risk in urban areas.