Identifying the Causality Relationship between Health Expenditure and Economic Growth: An Application on E7 Countries

Authors : Hasan DİNÇER, Serhat YUKSEL

Pages : 5-23

View : 19 | Download : 8

Publication Date : 2019-01-07

Article Type : Research Paper

Abstract :This study aims to identify the causality relationship between health expenditure and economic growth in emerging economies. Within this framework, E7 countries are evaluated by using Pedroni panel cointegration method and Dumitrescu Hurlin panel causality analysis. For this purpose, annual data for the years between 1996 and 2016 is considered. As a result of Pedroni panel cointegration test, it is defined that there is a long run relationship between economic growth with total health expenditure and public health expenditure, but this relationship is not valid between private health care expenditure and economic growth. According to Dumitrescu Hurlin panel causality analysis results, it is concluded that there is not a causality relationship from the health expenditure to the economic growth. However, it is also determined that economic growth is the main cause of total, public and private health expenditure. Therefore, it is recommended that the role of private sector in health should be improved so that the health expenditure can have a positive contribution to the economic development of emerging countries.
Keywords : Health Expenditure, E7 Countries, Economic Growth, Pedroni Panel Cointegration Analysis, Dumitrescu Hurlin Panel Causality Analysis