Culture and the demand for non-life insurance: Empirical evidences from middle-income and high-income economies*

This paper investigates the impact of culture on non-life insurance expenditure using a panel dataset covering 27 middle-income countries and 40 high-income countries in the period 1980–2014. Based on the two-step system GMM estimator, it is found that several cultural dimensions such as masculinity, uncertainty avoidance and power distance significantly explain the spending on non-life insurance in middle-income countries, while masculinity is the only cultural factor that significantly explains spending on non-life insurance in high-income countries. Traditional drivers of the demand for non-life insurance, such as per capita income, economic freedom and urbanization, also behave differently comparing between the two income-based groups of countries. These findings provide useful recommendations for business firms and policymakers around the world, especially transitional economies, to promote and sustain the development of the non-life insurance sector, which is an important engine for growth and prosperity.     

Determinants of non-life insurance expenditure in developed and developing countries: an empirical investigation

The determinants of non-life insurance expenditure in a panel data set covering 36 developed countries and 31 developing countries for the period 2000–2011 are analysed. Results of our instrumental variable analysis indicate that economic freedom, income, bank development, urbanization, culture and law systems are the key drivers of the non-life insurance expenditure across countries. However, their impacts differ significantly between the groups of developed and developing countries, suggesting that the heterogeneity among countries in terms of the level of development plays an important role. The global financial crisis is also found to influence the direction of those effects, especially in developed countries. The article yields useful policy and economic implications for governments and multinational non-life insurance companies with regard to the development of the non-life insurance sector, an important engine for economic growth and prosperity.     

Culture in Preferences for Income Equality and Safety Nets

Economic and social policies vary across countries, reflecting their cultures and shaping them. People in some countries are more loss averse than in others. People in some countries express stronger preferences for income equality than do people in others, and some countries offer stronger safety nets than others do. The cultural dimension of uncertainty avoidance expresses the degree to which people in a country feel uncomfortable with uncertainty and the way a country deals with the fact that the future can never be known. The author finds that uncertainty avoidance is associated with loss aversion. People are more loss averse in the domains of both portfolios and jobs in countries where uncertainty avoidance is high. Moreover, people in countries where uncertainty avoidance is high express stronger preferences for income equality, and social spending in such countries is high. The cultural dimension of power distance expresses the degree to which the less powerful members of a society accept and expect that power is distributed unequally. The author finds that people in countries where power distance is high express weaker preference for income equality, and social spending in such countries is low.     

Does Culture Drive Innovation and Export Quality?

Quality upgrading is important for two reasons: it helps us understand the determinants of trade flows between countries and it promotes economic development. We study the cultural determinants of export quality using Hofstede's four original cultural dimensions to provide hypotheses on R&D spending, patents per capita and export quality. We then employ three-stage least squares analysis and confirm our hypotheses. For example, we find uncertainty avoidance encourages small-scale continuous improvement initiatives and substantially increases export quality. Power distance and individualism increase export quality, while masculinity has a small impact on quality. Finally, we provide implications for understanding the direction of trade and developing policy.     

Culture,business environment and SMEs' profitability: Evidence from European Countries

This paper aims to examine whether and how, certain country-specific characteristics shape the profitability of SMEs. Using a large sample of around 40,000 firms operating in 25 EU countries over the period 2006–2014 we find that freedom from corruption, a better environment in terms of the conditions that could contribute to the ease of getting credit, and fewer government regulation related to the starting, operating, and closing a business, enhance profitability. The dimensions of national culture also play an important role. Our results show that individualism, masculinity, and long-term orientation have a positive impact on profitability, whereas power distance and uncertainty avoidance have the opposite effect. We also find that the magnitude of the impact of national culture on profitability depends on political stability and institutional quality.     

Medical technology and the production of health care

This article investigates the factors that determine differences across OECD countries in health outcomes, using data on life expectancy at age 65, over the period 1960 to 2007. We estimate a production function where life expectancy depends on health and social spending, lifestyle variables, and medical innovation. Our first set of regressions include a set of observed medical technologies by country. Our second set of regressions proxy technology using a spatial process. This article also tests whether in the long-run countries tend to achieve similar levels of health outcomes. Our results show that health spending has a significant and mild effect on health outcomes, even after controlling for medical innovation. However, its short-run adjustments do not seem to have an impact on health care productivity. Spatial spill overs in life expectancy are significant and point to the existence of interdependence across countries in technology adoption. Furthermore, nations with initial low levels of life expectancy tend to catch up with those with longer-lived populations.     

Uncertainty avoidance and the rate of business ownership across 21 OECD countries, 1976–2004

Persistent differences in the level of business ownership across countries have attracted the attention of scientific as well as political debate. Cultural as well as economic influences are assumed to play a role. This paper deals with the influence of cultural attitudes towards uncertainty on the rate of business ownership across 21 OECD countries. First, the concepts of uncertainty and risk are elaborated, as well as their relevance for entrepreneurship. An occupational choice model is introduced to underpin our reasoning at the macro-level. Second, regression analysis using pooled macro data for 1976, 1990 and 2004 and controlling for several economic variables, yields evidence that uncertainty avoidance is positively correlated with the prevalence of business ownership. According to our model, a restrictive climate of large organizations in high uncertainty avoidance countries pushes individuals striving for autonomy towards self-employment. Regressions for these 3 years separately show that in 2004, this positive correlation is no longer found, indicating that a compensating pull of entrepreneurship in countries with low uncertainty avoidance may have gained momentum in recent years. Third, an interaction term between uncertainty avoidance and GDP per capita in the pooled panel regressions shows that the historical negative relationship between GDP per capita and the level of business ownership is substantially weaker for countries with lower uncertainty avoidance. This suggests that rising opportunity costs of self-employment play a less important role in this cultural environment, or are being compensated by increasing entrepreneurial opportunities.

The effects of national culture on corporate social responsibility disclosure: a cross-country comparison

This article presents a cross-country analysis of the influence of national culture on corporate social responsibility (CSR) disclosure. We analyse the relationship between the Hofstede’s cultural dimensions and the sustainability disclosure with the GDP per capita (GDPPC) of 44 countries, using panel data with information based on the Global Reporting Initiative guidelines. The governance effectiveness and the foreign direct investment are also included in the analysis. The results show that in countries with higher GDPPC, the CSR disclosure is negatively related to individualism and masculinity and positively related to uncertainty avoidance and indulgence. When focusing in countries with lower GDPPC, the results suggest that CSR disclosure is negatively related to power distance and positively related to uncertainty avoidance. Moreover, five of the six Hofstede’s cultural dimensions negatively affect sustainability disclosure in countries with middle GDPPC.     

Fiscal policy,rent seeking,and growth under electoral uncertainty: theory and evidence from the OECD

Abstract. We construct a general equilibrium model of economic growth and optimally chosen fiscal policy, in which individuals compete with each other for a share of government spending and two political parties alternate in power according to exogenous electoral uncertainty. The main prediction is that uncertainty about remaining in power results in increased fiscal spending, which in turn distorts incentives by pushing individuals away from productive work to rent‐seeking activities; then, distorted incentives hurt growth. This scenario receives empirical support in a dataset of 25 OECD countries over the period 1982–96. In particular, uncertainty about remaining in power leads to larger government shares in GDP, which in turn exert an adverse effect on the ICRG index measuring incentives and this is bad for growth.     

Revisit causal nexus between military spending and debt: A panel causality test

This study revisits the causal relationship between military spending and debt burden in 11 OECD countries via a panel causality analysis that accounts for both cross-sectional dependence and heterogeneity across countries. Our empirical results indicate unidirectional causality from military spending to debt burden for Japan, Portugal, and the US; one-way causality from debt burden to military spending for both Canada and the UK; bidirectional causality for Spain; and for the rest of countries, we do not find any relationship between military spending and debt burden. The empirical evidence does not provide consistent results regarding the causal relationship between military spending and debt burden in these 11 OECD countries.     

Procyclical government spending: Patterns of pressure and prudence in the OECD

This paper tests for differences in the cyclicality of government spending across functional categories. Evidence from 20 OECD countries suggests that procyclicality is more likely in smaller functional budgets, but capital spending is more likely to be procyclical for the larger spending categories.     

Is Post-Communist Health Spending Unusual?

What factors determine a country's spending on health? And what factors determine the share of spending financed by the public sector? Taking these factors into account, is post-communist health spending unusual? For the OECD economies, we find that per capita health spending is strongly related to per capita income, with an elasticity of about 1.5. The elasticity for developing economies is close to one. Spending is also positively related to the elderly dependency rate, but the relationship is weaker than a static comparison of spending by the elderly and non-elderly would suggest. Even though health spending as a share of GDP in the post-communist countries of eastern and central Europe is below the OECD average, there is evidence of above normal health spending in most countries when we control for income and demographics. For Hungary, the ‘excess’ spending reached over three percentage points of GDP in 1994. For the OECD sample, four development indicators account for half the variation in the public sector share of total health spending. Political variables help explain the remainder. If the post-communist countries converge to the market economy pattern, the share of public financing will fall, yet still remain well above half.     

The problem of the uninsured

The problem of the uninsured cannot be fully understood without considering the role of non-market alternatives to ‘market insurance’ called ‘self-insurance’ and ‘self-protection’ (SISP), including the public ‘health care safety-net’ system. We tackle the problem by formulating a ‘full-insurance’ paradigm that accounts for all four interacting insurance measures. We apply two versions of the full-insurance model to estimate, via calibrated simulations, the impacts of SISP on the fraction of uninsured, health spending, and health levels, and to assess how the mandated Affordable Care Act might affect these outcomes in comparison with the CBO projections in 2010. The results indicate that policy analyses which overlook the role of the real price of market insurance relative to the shadow prices of SISP in determining the decision to insure can grossly distort the capacity of mandated reforms like the ACA to insure the uninsured, contain overall health care costs, and improve health and welfare outcomes.     

Public financing of health expenditures,insurance, and health outcomes

The effects of public financing of health expenditures, insurance coverage and other factors on health outcomes are examined within health production models estimated using 1960–1992 data across 20 OECD countries. Mortality rates are found to depend on the mix of health care expenditures and the type of health insurance coverage. Increases in the publicly financed share of health expenditures are associated with increases in mortality rates. Increases in inpatient and ambulatory insurance coverage are associated with reduced mortality. The effects of GDP, health expenditures and age structure on mortality are similar to those in previous studies. Tobacco use, alcohol use, fat consumption, female labour force participation, and education levels are also significantly related to overall mortality rates. Increases in income inequality are associated with lower mortality rates, suggesting that the negative relationship between inequality and health outcomes suggested by some previous studies does not remain when a more complete model is estimated. The result that increases in public financing increase mortality rates is robust to a number of changes in specifications and samples. Thus, as countries increase the level of their health expenditures, they may want to avoid increasing the proportion of their expenditures that are publicly financed.     

Short-termism of long-term investors? The investment behaviour of Dutch insurance companies and pension funds

Countercyclical investment strategies of large institutional investors such as insurance companies and pension funds can support financial stability, while procyclical investment behaviour is considered as destabilizing at a macro level. Yet, there is limited understanding of how insurance companies and pension funds invest during market shocks, such as the global financial crisis. Investigating the equity and fixed income portfolios of Dutch non-life insurers, life insurers and pension funds, we find evidence for procyclical behaviour by insurance companies (both life and non-life). For pension funds, we find evidence for countercyclical behaviour during market upturns.     

论存款保险制度的设计

存款保险制度在维护金融体系稳定的同时也降低了存款人对银行风险的关注,并导致"道德风险"和"逆向选择"。分析了存款保险制度的三个主要目标以及如何在这三个目标之间取得平衡,并借鉴主要国家和地区的存款保险制度特征,提出了我国设计存款保险制度的相关建议。     

Two separated effects of employer-provided health insurance on job mobility

We estimate the effect of employer-provided health insurance (EPHI) on job mobility via a dynamic model of joint employment and health insurance decision in the presence of uncertainty about wage rate and health status transitions. The model is based on a Markov decision process in which a hedonic wage approach provides an economic rationale for the different choices and health insurance serves as an input to the health production process. Including health transitions in the model helps us to understand how the availability of EPHI (positive job characteristic) and holding EPHI (the wage-health insurance trade-off) enter into the individuals’ decisions. The model is estimated using the 1999–2000 Medical Expenditure Panel Survey panel 4, and the results show that the ‘pure’ effects of holding EPHI are negligible, the ‘full’ effects of EPHI are significant and the degrees of the inefficiency vary between 14% and 25% across different states.     

Health insurance and consumption: Evidence from China’s New Cooperative Medical Scheme

We exploit a quasi-natural experiment arising from the introduction of a health insurance program in rural China to examine how the insurance coverage affects household consumption. Results show that, on average, the health insurance coverage increases nonmedical-related consumption by more than 5%. This insurance effect is observed even in households with no out-of-pocket medical spending. In addition, the insurance effect is stronger in households with worse self-reported health status. These results are consistent with the precautionary savings argument. The insurance effect also varies by household experience with the program. In particular, the effect is significant only in villages where some households have actually obtained reimbursement from the insurance program. The program within these villages stimulates less consumption among new participants than among households that have participated in the program for more than a year.     

中国人寿保险公司人力资源竞争力外部影响因素分析

我国保险业的发展自改革开放以来十分迅猛,寿险业的增长更是快于GDP和人均可支配收入的增长,也快于非寿险业的增长,我国寿险市场蕴藏的巨大发展潜力不容小觑。对于中国人寿保险公司来说,解决如何适应当前的保险市场竞争环境,如何在明确公司优劣势的前提下进一步提升自身的人力资源竞争力问题,具有十分重要的意义。就此,从影响人力资源竞争力外部影响因素的角度如政府法律法规、市场环境、行业规则、行业诚信制度等方面进行分析和论述。     

Health spending and public pension: evidence from panel data

This article empirically investigates the determinants of aggregate health expenditure in a panel of OECD countries from 1980 to 2005. We differ from most existing studies by testing some new determinants motivated by recent theoretical advances in the literature. We find that a one percentage increase in public pension payments per elderly person leads to approximately a one third percentage increase in aggregate health spending, and this effect is significant and robust across a variety of model specifications. A back of the envelope calculation based on this estimate suggests that the expansion of the public pension programme on average accounts for approximately over one fifth of the rise in aggregate health expenditure as a share of GDP in the set of OECD countries during 1980–2005. In addition, we find that the estimated effect of GDP per capita in our model ranges from 0.66 to 0.80, which is consistent with the results from some recent studies, and thus further reinforces the finding in the literature that health care is not a luxury good.