Interdependence between business insurance and entrepreneurship and their impact on the economic growth

Vladimir Njegomir; Dragan Stojić; Jelena Demko-Rihter

doi:10.7595/management.fon.2023.0013

Vladimir Njegomir Union University, Faculty of Law and Business Studies Dr Lazar Vrkatic, Novi Sad, Serbia http://orcid.org/0000-0003-0148-6906
Dragan Stojić University of Novi Sad, Faculty of Economics, Subotica, Serbia http://orcid.org/0000-0003-4067-570X
Jelena Demko-Rihter University of Novi Sad, Faculty of Technical Sciences, Department of Industrial Engineering and Management, Novi Sad, Serbia http://orcid.org/0000-0001-7762-3095

DOI: https://doi.org/10.7595/management.fon.2023.0013

Abstract

Research Question: What type of mutual relations exist between business insurance and entrepreneurship, and how do they impact economic growth? Motivation: The primary motive for the research is the identified literature gap in the field of interdependence between business insurance and entrepreneurship and their joint contribution to economic growth. Idea: To test whether the interdependence between business insurance and entrepreneurship exists and their combined contribution to economic growth. The following independent variables were used: premium per entrepreneur, solved claims per entrepreneur, total technical reserves, GDP/p.c., a measure of demographic variables in the form of education level, a measure of the impact of banking, and the measure for institutional factors in terms of establishment costs the number of entrepreneurs by years as the dependent variable was considered. Data: Data were gathered from various sources (Serbian Statistical Office, National Bank of Serbia, World Bank) in the period from 2008 to 2019. Tools: Descriptive statistics, regression analysis, and statistical tests. Findings: The presented results show that there is a significant influence of insurance, both through insurance premiums per entrepreneur, which are paid to ensure the safety of the entrepreneur, and through resolved claims per entrepreneur, which present an indicator of insurance compensation in the case of damage to the entrepreneur, and through the impact of insurance on financial market by the amount of technical reserves. The return influence was not confirmed, considering that the number of entrepreneurs per year is a stationary variable, so the effect of the number of entrepreneurs on the development of insurance, measured by the premium per entrepreneur, could not be confirmed. Contribution: This research conducted in Serbia, a developing and upper middle-income country, confirmed the positive impact of insurance on entrepreneurship, but the return influence of entrepreneurship on insurance was not proven.

Author Biographies

Vladimir Njegomir, Union University, Faculty of Law and Business Studies Dr Lazar Vrkatic, Novi Sad, Serbia

Vladimir Njegomir, PhD is a Full Professor of Insurance, Risk Management in Insurance and Entrepreneurship at the Faculty of Law and Business Studies dr Lazar Vrkatic, Novi Sad. He worked as an economic analyst in a software company based in London for nine years. He was an adviser for strategic planning, corporate governance, and business analysis in the insurance company „Dunav osiguranje“. He has two PhD. The first PhD is in Technical Sciences, major Risk Management, and Insurance. The second PhD is in Economics, major Entrepreneurship, and Insurance. From 2018 he has been elected as a Vice Dean for Scientific Research. Besides, from 2016 he is Editor-in-Chief of CIVITAS, the scientific journal focusing on research in social sciences, and a member of the editorial board of „Svet osiguranja“, the journal with the focus on the research in insurance. He published over 150 scientific and professional papers, both at home and abroad. He is a co-author of eight books and the sole author of five books.

Dragan Stojić, University of Novi Sad, Faculty of Economics, Subotica, Serbia

Dragan Stojić is an Associate Professor at the Faculty of Economics in Subotica, Serbia. He defended his doctoral thesis: „Modelling business decision-making based on evidence theory and fuzzy logic“ in 2013 and has been teaching lectures in Mathematical fundamentals, Actuarial Mathematics and Multiple criteria decision making. He is an author of numerous scientific papers in the fields of insurance, management and investments.

Jelena Demko-Rihter, University of Novi Sad, Faculty of Technical Sciences, Department of Industrial Engineering and Management, Novi Sad, Serbia

Jelena Demko-Rihter, PhD is an Associate Professor at the Faculty of Technical Sciences (University of Novi Sad), Department of Industrial Engineering and Management. Since 2003 she has been engaged in the teaching process for courses Management Accounting, Financial Management, Investment Management. She holds a BSc and MSc in finance (Faculty of Economics, University of Novi Sad) and a PhD in management accounting (Faculty of Economics, University of Kragujevac). She is author and co-author of numerous research and scientific papers on various issues regarding institutional investors, management accounting, corporate finance, published in domestic and international journals and conference proceedings.