Cuadernos de Economía

ISSN : 0210-0266

The Role of Performance Jordanian Insurance Companies in Economic Growth: Evidence from the PMG Panel-ARDL Approach

  • Mohammad H. Saleh , Department of Finance, The University of Jordan, Aqaba, Jordan
  • Omar Jawabreh , Department of Hotel Management, The University of Jordan, Aqaba, Jordan
  • Basel J. A. Ali , College of Economics and Management (CoEM), Al Qasimia University, Sharjah, United Arab Emirates


Pooled Mean Group, Panel Autoregressive Distributed Lag, Dumitrescu and Hurlin causality, total revenues companies, insurance companies' investments, economic growth.


The insurance sector holds significant importance within the financial landscape of Jordan, as it plays a crucial role in mitigating and managing risks. The objective of this study was to investigate the impact of the insurance sector on economic growth, analyse the enduring association between variables pertaining to the insurance sector and economic growth, and ascertain the direction of the causal relationship between insurance variables and economic growth. The analysis employed the pooled mean group estimation technique within the panel autoregressive distributed lag model (PMG/ARDL) framework to examine the variables over the period from 2008 to 2021. The findings of the study indicate a statistically significant long-term equilibrium association between insurance and economic growth variables. However, no such relationship was observed in the short term. The Dumitrescu and Hurlin causality analysis demonstrates a unidirectional causal linkage, wherein economic growth exerts an influence on both insurance companies' investments and total revenues for companies. Moreover, a reciprocal association exists between the assets of insurance companies and economic growth. Insurance companies should focus their investments on profitable sectors in order to enhance the performance of the insurance industry in Jordan and enhance its competitiveness. This will also lead to an improvement in the investment multiplier's performance within the insurance sector, thereby increasing its contribution to overall economic growth.