Contractual Savings, Stock, and Asset Markets
The authors study the relationship between the development of insurance, and contractual savings, (the assets and portfolio composition of pension funds, and life and non-life insurance companies) and the development of stock markets (market capita...
| Main Authors: | , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2000/11/748749/contractual-savings-stock-asset-markets http://hdl.handle.net/10986/19779 |
| id |
okr-10986-19779 |
|---|---|
| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AGENTS ANNUITY ARBITRAGE ASSETS AUDITING BALANCE SHEETS BANK DEPOSITS BANK PORTFOLIOS BANKING SECTOR BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BENEFICIARIES BOND MARKETS BONDS BORROWING CAPITAL MARKET REGULATION CAPITAL MARKETS CAPITALIZATION CARTEL COMMISSIONS CONTINGENT LIABILITIES CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE CONTROL CORPORATE GOVERNANCE CREDIT RISK CREDIT RISKS DEBT DEFINED BENEFIT PENSION PLANS DISASTERS ECONOMIC GROWTH EMERGING MARKETS ENDOGENOUS VARIABLES EQUILIBRIUM EQUITY MARKETS EXPECTED RETURN FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL INNOVATION FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL STRUCTURES FREE ENTRY GDP GROWTH RATE INDEMNITY INFLATION INFORMATION DISCLOSURE INSURANCE INSURANCE BENEFITS INSURANCE COMPANIES INTEREST RATES INVESTMENT BANKS LIFE INSURANCE LIFE INSURANCE COMPANIES LIQUID ASSETS LIQUIDITY LONG TERM LIABILITIES MACROECONOMICS MARKET EQUILIBRIUM MARKET VALUE MITIGATION MORAL HAZARDS MUTUAL FUNDS NON- LIFE INSURANCE NON-LIFE INSURANCE PENALTIES PENSION FUNDS PENSION PLANS PENSION SYSTEMS PER CAPITA INCOME PORTFOLIO PORTFOLIOS POSITIVE EFFECTS PROVIDENT FUNDS PUBLIC DEBT RATING AGENCIES REAL INTEREST RATE REAL SECTOR REGULATORY FRAMEWORK RESERVES RETIREMENT RISK DIVERSIFICATION RISK MANAGEMENT RISK PREMIUM SAVINGS SAVINGS SAVINGS INCREASES SAVINGS INSTRUMENTS SAVINGS SCHEMES SECURITIES SECURITIES MARKETS SETTLEMENT SYSTEMS SOLVENCY STOCK EXCHANGES STOCK MARKETS TAKEOVER TERM FINANCE TRANSACTION COSTS TRANSPARENCY UNEMPLOYMENT VENTURE CAPITAL WEALTH |
| spellingShingle |
AGENTS ANNUITY ARBITRAGE ASSETS AUDITING BALANCE SHEETS BANK DEPOSITS BANK PORTFOLIOS BANKING SECTOR BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BENEFICIARIES BOND MARKETS BONDS BORROWING CAPITAL MARKET REGULATION CAPITAL MARKETS CAPITALIZATION CARTEL COMMISSIONS CONTINGENT LIABILITIES CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE CONTROL CORPORATE GOVERNANCE CREDIT RISK CREDIT RISKS DEBT DEFINED BENEFIT PENSION PLANS DISASTERS ECONOMIC GROWTH EMERGING MARKETS ENDOGENOUS VARIABLES EQUILIBRIUM EQUITY MARKETS EXPECTED RETURN FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL INNOVATION FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL STRUCTURES FREE ENTRY GDP GROWTH RATE INDEMNITY INFLATION INFORMATION DISCLOSURE INSURANCE INSURANCE BENEFITS INSURANCE COMPANIES INTEREST RATES INVESTMENT BANKS LIFE INSURANCE LIFE INSURANCE COMPANIES LIQUID ASSETS LIQUIDITY LONG TERM LIABILITIES MACROECONOMICS MARKET EQUILIBRIUM MARKET VALUE MITIGATION MORAL HAZARDS MUTUAL FUNDS NON- LIFE INSURANCE NON-LIFE INSURANCE PENALTIES PENSION FUNDS PENSION PLANS PENSION SYSTEMS PER CAPITA INCOME PORTFOLIO PORTFOLIOS POSITIVE EFFECTS PROVIDENT FUNDS PUBLIC DEBT RATING AGENCIES REAL INTEREST RATE REAL SECTOR REGULATORY FRAMEWORK RESERVES RETIREMENT RISK DIVERSIFICATION RISK MANAGEMENT RISK PREMIUM SAVINGS SAVINGS SAVINGS INCREASES SAVINGS INSTRUMENTS SAVINGS SCHEMES SECURITIES SECURITIES MARKETS SETTLEMENT SYSTEMS SOLVENCY STOCK EXCHANGES STOCK MARKETS TAKEOVER TERM FINANCE TRANSACTION COSTS TRANSPARENCY UNEMPLOYMENT VENTURE CAPITAL WEALTH Impavido, Gregorio Musalem, Alberto R. Contractual Savings, Stock, and Asset Markets |
| relation |
Policy Research Working Paper;No. 2490 |
| description |
The authors study the relationship
between the development of insurance, and contractual
savings, (the assets and portfolio composition of pension
funds, and life and non-life insurance companies) and the
development of stock markets (market capitalization and
value traded). Their contribution lies in providing
cross-country, and time-series on a hypothesis that is very
popular - but had not been substantiated - among supporters
of funded pension systems, and insurance in which reserves
are largely invested in tradable securities (equities and
bonds). The authors present a three-assets model (money,
quasi money, and shares) to study the effects of the
development of contractual savings (pension funds and life
insurance companies) and non-life insurance companies on
assets market equilibrium, and on stock market development.
They use an unbalanced panel of 21 OECD, and 5 developing
countries, and an error components two-stage least squares
(EC2SLS) estimator, including a test for endogeneity of
these institutional investors. The results support the
hypothesis that contractual savings, and non-life insurance
companies can be treated as exogenous to the development of
stock markets; that contractual savings and non-life
insurance companies, as well as their portfolio policies,
promote stock market development as measured by stock market
capitalization, and value traded as a share of GDP. The
results show that stock market capitalization is positively
correlated with the return on stocks, the assets of
contractual savings and non-life insurance companies, the
shares of stocks in the portfolios of contractual savings
and non-life insurance companies, and the value traded
stocks. Stock market capitalization is negatively correlated
with the real interest rate, the real return on money
(measured by the inverse of inflation), and stock market
volatility. Stock market value traded is positively
correlated with the shares of stocks in the portfolios of
contractual savings and non-life insurance companies, and
the real return on money. It is negatively correlated with
the real interest rate. The authors conclude that insurance
and contractual savings are powerful instruments for
developing stock markets, providing depth and liquidity.
Higher liquidity, in turn, further promotes market capitalization. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Impavido, Gregorio Musalem, Alberto R. |
| author_facet |
Impavido, Gregorio Musalem, Alberto R. |
| author_sort |
Impavido, Gregorio |
| title |
Contractual Savings, Stock, and Asset Markets |
| title_short |
Contractual Savings, Stock, and Asset Markets |
| title_full |
Contractual Savings, Stock, and Asset Markets |
| title_fullStr |
Contractual Savings, Stock, and Asset Markets |
| title_full_unstemmed |
Contractual Savings, Stock, and Asset Markets |
| title_sort |
contractual savings, stock, and asset markets |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2000/11/748749/contractual-savings-stock-asset-markets http://hdl.handle.net/10986/19779 |
| _version_ |
1764440626196119552 |
| spelling |
okr-10986-197792021-04-23T14:03:44Z Contractual Savings, Stock, and Asset Markets Impavido, Gregorio Musalem, Alberto R. AGENTS ANNUITY ARBITRAGE ASSETS AUDITING BALANCE SHEETS BANK DEPOSITS BANK PORTFOLIOS BANKING SECTOR BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BENEFICIARIES BOND MARKETS BONDS BORROWING CAPITAL MARKET REGULATION CAPITAL MARKETS CAPITALIZATION CARTEL COMMISSIONS CONTINGENT LIABILITIES CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE CONTROL CORPORATE GOVERNANCE CREDIT RISK CREDIT RISKS DEBT DEFINED BENEFIT PENSION PLANS DISASTERS ECONOMIC GROWTH EMERGING MARKETS ENDOGENOUS VARIABLES EQUILIBRIUM EQUITY MARKETS EXPECTED RETURN FINANCIAL ASSETS FINANCIAL CRISIS FINANCIAL INNOVATION FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL STRUCTURES FREE ENTRY GDP GROWTH RATE INDEMNITY INFLATION INFORMATION DISCLOSURE INSURANCE INSURANCE BENEFITS INSURANCE COMPANIES INTEREST RATES INVESTMENT BANKS LIFE INSURANCE LIFE INSURANCE COMPANIES LIQUID ASSETS LIQUIDITY LONG TERM LIABILITIES MACROECONOMICS MARKET EQUILIBRIUM MARKET VALUE MITIGATION MORAL HAZARDS MUTUAL FUNDS NON- LIFE INSURANCE NON-LIFE INSURANCE PENALTIES PENSION FUNDS PENSION PLANS PENSION SYSTEMS PER CAPITA INCOME PORTFOLIO PORTFOLIOS POSITIVE EFFECTS PROVIDENT FUNDS PUBLIC DEBT RATING AGENCIES REAL INTEREST RATE REAL SECTOR REGULATORY FRAMEWORK RESERVES RETIREMENT RISK DIVERSIFICATION RISK MANAGEMENT RISK PREMIUM SAVINGS SAVINGS SAVINGS INCREASES SAVINGS INSTRUMENTS SAVINGS SCHEMES SECURITIES SECURITIES MARKETS SETTLEMENT SYSTEMS SOLVENCY STOCK EXCHANGES STOCK MARKETS TAKEOVER TERM FINANCE TRANSACTION COSTS TRANSPARENCY UNEMPLOYMENT VENTURE CAPITAL WEALTH The authors study the relationship between the development of insurance, and contractual savings, (the assets and portfolio composition of pension funds, and life and non-life insurance companies) and the development of stock markets (market capitalization and value traded). Their contribution lies in providing cross-country, and time-series on a hypothesis that is very popular - but had not been substantiated - among supporters of funded pension systems, and insurance in which reserves are largely invested in tradable securities (equities and bonds). The authors present a three-assets model (money, quasi money, and shares) to study the effects of the development of contractual savings (pension funds and life insurance companies) and non-life insurance companies on assets market equilibrium, and on stock market development. They use an unbalanced panel of 21 OECD, and 5 developing countries, and an error components two-stage least squares (EC2SLS) estimator, including a test for endogeneity of these institutional investors. The results support the hypothesis that contractual savings, and non-life insurance companies can be treated as exogenous to the development of stock markets; that contractual savings and non-life insurance companies, as well as their portfolio policies, promote stock market development as measured by stock market capitalization, and value traded as a share of GDP. The results show that stock market capitalization is positively correlated with the return on stocks, the assets of contractual savings and non-life insurance companies, the shares of stocks in the portfolios of contractual savings and non-life insurance companies, and the value traded stocks. Stock market capitalization is negatively correlated with the real interest rate, the real return on money (measured by the inverse of inflation), and stock market volatility. Stock market value traded is positively correlated with the shares of stocks in the portfolios of contractual savings and non-life insurance companies, and the real return on money. It is negatively correlated with the real interest rate. The authors conclude that insurance and contractual savings are powerful instruments for developing stock markets, providing depth and liquidity. Higher liquidity, in turn, further promotes market capitalization. 2014-08-27T20:21:29Z 2014-08-27T20:21:29Z 2000-11 http://documents.worldbank.org/curated/en/2000/11/748749/contractual-savings-stock-asset-markets http://hdl.handle.net/10986/19779 English en_US Policy Research Working Paper;No. 2490 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |