The relationships between information technology, e-commerce, and e-finance in the financial institutions: Evidence from the insurance industry

This research investigates the impact of IT on the cost efficiencies and cost frontiers of the insurance industry. In addition, we compare the differences of the effect of IT on the insurance industry across countries. Moreover, we test the international market's integration hypothesis and explore the influences of other factors (e.g., scope economy, macroeconomic variables, etc.) on the cost efficiencies of the insurance industry. The evidence from both the two-equation and Tobit models indicates that IT improves cost efficiencies for the developed countries but reduces those for the newly developed economies under study. That is, the international productivity paradox hypothesis is rejected for the insurance firms in the developed countries considered. In addition, results of the cost frontiers for the insurance firms suggest that, IT improves the cost efficiency for the developed countries but not for the emerging economies.