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

Mingqing Yuan

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Economic growth; Healthcare expenditure; CO2 emissions; System-GMM; PVAR; Asia-Pacific region (search for similar items in EconPapers)
JEL-codes: C33 C36 C51 I15 O44 O5 O53 Q53 Q56 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ene, nep-env and nep-sea
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https://mpra.ub.uni-muenchen.de/122760/1/MPRA_paper_119994.pdf revised version (application/pdf)

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