Does Scale and Efficiency of Government Health Expenditure Promote Development of the Health Industry?

Mengying Wang, Stuart Gilmour, Chunhai Tao and Kaixuan Zhuang
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Mengying Wang: School of Statistics, Jiangxi University of Finance and Economics, No.169, East Shuanggang Road, Changbei, Nanchang 330013, China
Stuart Gilmour: Graduate School of Public Health, St. Luke’s International University, 5th Floor, Omura Susumu and Mieko Memorial Chuo-ku, Tokyo 105-0045, Japan
Chunhai Tao: School of Statistics, Jiangxi University of Finance and Economics, No.169, East Shuanggang Road, Changbei, Nanchang 330013, China
Kaixuan Zhuang: School of Statistics, Jiangxi University of Finance and Economics, No.169, East Shuanggang Road, Changbei, Nanchang 330013, China

IJERPH, 2020, vol. 17, issue 15, 1-19

Abstract: Macro-economic development of China’s health industry is essential to the sustainable development and growth momentum of the national economy. Strategies to promote the development and rebalancing of the industrial structure need to be improved in order to transform China’s health industry and drive development. Based on panel data of 25 regions in China from 2004 to 2016, this paper analyzes the linear and non-linear relationship between Chinese government health expenditure (GHE), GHE efficiency, and the macro-economic development of the health industry. It uses a novel index of industrial structure to measure the transformation of industrial sectors in China, based on a semi-parametric generalized additive model. The model shows that per capita GHE and its efficiency have a significant positive linear and comprehensive non-linear effect on the development of health industry structure. By analyzing the interaction of GHE and its efficiency, we show that high expenditure with low-efficiency regimes and high expenditure with high-efficiency regimes have a positive impact on the development of industrial structure. Following the empirical results, the paper puts forward corresponding policy suggestions for the role of fiscal policy in promoting the development of the health industry in China.

Keywords: macro-economic development; health industry; government health expenditure; efficiency; semi parametric generalized additive model (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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