Information Asymmetry and Insurance in Africa
Journal of African Business, 22(3), pp. 394-410.
24 Pages Posted: 7 Oct 2020 Last revised: 23 Jul 2021
Date Written: August 1, 2020
In this study, we assess the relevance of decreasing information asymmetry on life and non-life insurance consumption, by using data from 48 African countries during the period 2004-2014. Reduced information asymmetry is proxied by information sharing offices, namely: public credit registries and private credit bureaus. The empirical evidence is based on the Generalised Method of Moments. The findings show that information sharing offices increase insurance consumption with a comparatively higher magnitude in life insurance penetration, relative to non-life insurance penetration. Practical and theoretical implications are discussed.
Keywords: Insurance; Information Asymmetry
JEL Classification: I30; G20; G22; O16; O55
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