Public Health Expenditure and Economic Growth Nexus in South Asia

Jawad Khan; Dr. Fazli Hakim  Khattak

Jawad Khan Applied Economics, School of Economics and Finance, Xi'an Jiaotong University China
Dr. Fazli Hakim Khattak

Keywords: Public Health Expenditure; Economic Growth; Panel Cointegration Regression FMOLS; South Asian Countries

Abstract

This study aims to analyze the nexus between public health expenditure and economic growth. For this purpose, the panel data has been utilized over the period from 1995 to 2018 for seven South Asian countries. Public health expenditures have been used as independent variables, economic growth (GDP per capita) as dependent variable, and HDI, labor force, life expectancy and infant mortality as control variables. Granger causality test was applied for prediction, and the analysis was conducted panel cointegration test and panel cointegration regression FMOLS technique. Panel cointegration regression FMOLS estimator investigated the study existence of statistically significant long run relationship between economic growth and public health expenditure. The results of the panel cointegration regression FMOLS analysed that long-term economic growth is positively and significantly affected by public health expenditure, HDI, labor force, life expectancy, and infant mortality. Close values of long-run coefficients for all estimations confirm the robustness of the estimated results. The study investigated public health expenditure is positively and significantly impact on economic growth. The study provides specific evidence to policymakers that increased public health expenditure contributes to increased countries economic growth.

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