The relationship between firm growth and firm characteristics has been a critical issue for insurers. This study examines the determinants of firm growth and tests Gibrat's law of life insurance company expansion in the context of the young but fast-growing insurance market for both domestic and foreign firms in Taiwan. By using Heckman's two-stage regression, our empirical results reveal that Gibrat's law does not hold for either domestic or foreign life insurers during the period from 1996 to 2007. Smaller life insurers achieve greater growth than larger ones in the booming economy. Furthermore, factors such as age, cross-marketing and product diversification show different effects on growth between domestic and foreign firms.
The Geneva Papers on Risk and Insurance - Issues and Practice 39(1), pp.1-24