Markets that Matter

Bonds, Insurance, and Economic Growth

Authors

  • Prem Bahadur Budhathoki Saraswati Multiple Campus, Tribhuvan University, Nepal Author
  • Yadav Mani Upadhyaya Saraswati Multiple Campus, Tribhuvan University, Nepal Author
  • Shiva Raj Ghimire Saraswati Multiple Campus, Tribhuvan University, Nepal Author

DOI:

https://doi.org/10.32674/259x3b46

Keywords:

Capital formation, capital market, employment, insurance premium, urbanization

Abstract

Purpose: This study primarily examines the effect of bond and insurance market development on economic growth; however, it also investigates the impact of capital formation, employment, foreign direct investment, trade openness, and urbanization on economic growth by employing a sample of 46 countries worldwide for the period 2000-2021.

Design/methodology/approach: This study employed a quantitative explanatory research design using balanced panel data, which was obtained from the Global Financial Development Database and the World Development Indicators were analyzed using fixed-effects and random-effect panel regression to examine the causal relationship.

Findings: The outcome reveals that the bond market development favorably impacts economic growth. The measures of insurance growth, life insurance, nonlife insurance, and total premiums favorably influence economic prosperity. As expected, the gross fixed capital formation and employment stimulate economic growth. Moreover, the foreign direct investment and trade openness have a negligible impact on economic growth. Urbanization hurts economic growth.

Conclusion: The findings highlight the pivotal role of bond market and insurance market development in fostering economic growth, highlighting the importance of strengthening financial market institutions to achieve sustainable increases in GDP per capita.

Implications: Policymakers could use these findings to increase desired growth. This could be achieved through developing both bond and insurance markets, decreasing unemployment, and limiting rapid urbanization by increasing rural facilities.

Originality/value: The study gives new empirical evidence on how bond market development and insurance market development influence economic growth worldwide. This topic has received less emphasis in earlier empirical studies, especially the influence of the bond market on economic growth worldwide.

JEL Classification: G10, G22, O16, O47

Author Biographies

  • Prem Bahadur Budhathoki, Saraswati Multiple Campus, Tribhuvan University, Nepal

    Prem Bahadur Budhathoki, MPhil, is an Associate Professor and Head of Research Department at Faculty of Management, Saraswati Multiple Campus, Tribhuvan University, Nepal. He earned his Master of Philosophy (MPhil) degree with a specialization in Finance from Purbanchal University, Nepal. He has published numerous articles in both Scopus-indexed and non-indexed journals, focusing on banking and insurance. His research interests include banking, government finance, insurance, and financial literacy.

  • Yadav Mani Upadhyaya, Saraswati Multiple Campus, Tribhuvan University, Nepal

    Dr. Yadav Mani Upadhyaya is an assistant professor of economics at Tribhuvan University at Saraswati Multiple Campus. He holds a Ph.D. in Economics from Nepal Sanskrit University and has over 17 years. His research interests encompass economic growth and financial development. Dr. Upadhyaya has authored numerous books, research reports, and peer-reviewed articles published in both national and international journals. In 2023, the prestigious Nepal Vidya Bhushan 'Ka' award honored him for his contributions higher education.

  • Shiva Raj Ghimire, Saraswati Multiple Campus, Tribhuvan University, Nepal

    Shiva Raj Ghimire, PhD Scholar is an Assistant Professor and Head of Finance Department at Faculty of Management, Saraswati Multiple Campus, Tribhuvan University, Nepal. He holds a Master of Business Administration (MBA) from Tribhuvan Universitry, Faculty of Management. Mr. Ghimire has published numerous articles in both Scopus-indexed, and non-indexed journals, covering topics such as banking, insurance, and economics. His areas of interest include emerging issues in banking, insurance, and mutual funds the national and international economy, and corporate finance.

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Published

2026-07-26

Issue

Vol. 9 No. 1 (2026): Journal of Insurance and Social Security

Section

Insurance Markets and Operations

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Copyright (c) 2026 Yadav Mani Upadhyaya, Prem Bahadur Budhathoki, Shiva Raj Ghimire (Author)

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