The nexus between economic growth, healthcare expenditure, and CO2 emissions in Asia-Pacific countries: Evidence from a PVAR-GMM approach

Yuan, Mingqing (2023): The nexus between economic growth, healthcare expenditure, and CO2 emissions in Asia-Pacific countries: Evidence from a PVAR-GMM approach.

Abstract

In this study, a panel vector autoregressive (PVAR) model with system generalized method of moments (GMM) estimation is utilized to examine the dynamic causalities among economic growth, healthcare expenditure, and CO2 emissions in Asia-Pacific countries from 2000 to 2019. Results show that economic growth has a positive effect on government healthcare expenditure, with bidirectional causality observed with private healthcare spending. No significant long-term relationship is detected in the former case. These results emphasize the role of economic development in bolstering public health and reflect a later weakening of the level of government response as economies expand. Additionally, CO2 emissions negatively affect economic growth in a unidirectional manner. The impulse response analysis supports the presence of the environmental Kuznets curve (EKC). Furthermore, while a bidirectional causality exists between CO2 emissions and government healthcare spending, a long-standing correlation remains elusive. This result calls for a dual focus on enhancing healthcare services and reducing emission for health and environmental benefits. The results of variance decomposition highlight the significant contribution of government healthcare expenditure to economic growth and private healthcare spending, in addition to the important role of private healthcare spending in economic growth. These findings offer policymakers evidence-based insights to formulate strategies that balance economic growth, sustainable development, and healthcare provision.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic growth, Healthcare expenditure, CO2 emissions, System-GMM, PVAR, Asia-Pacific region
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C36 - Instrumental Variables (IV) Estimation; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; I - Health, Education, and Welfare > I1 - Health > I15 - Health and Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O44 - Environment and Growth; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O53 - Asia including Middle East; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution ; Water Pollution ; Noise ; Hazardous Waste ; Solid Waste ; Recycling; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth

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