Can Insurance Industry in Guangdong Province Promote the Local Economic Development? - Based on the Empirical Study of Two-Departments Model

In order to find out the relationship between the insurance sector and economic development, this paper use Two-sector Model, firstly to check the stability of the data, then carrying on the cointegration test after the result of unstability on data, the long-run stable relationship between the economic development, insurance industry, asset investment and the labour-force is discovered. 1% growth of insurance industry can simulate 1.08% economic development comprehensively as well as producing 0.11% externality on the other sector. Meanwhile, the marginal productive force proves to be 0.149 which is higher than the national number. Insurance industry in Guangdong province should keep the growth while carrying out the structural reform to promote local economic development.