Asymmetric effect of FDI and public expenditure on population health: new evidence from Pakistan based on non-linear ARDL

Rahman, Saif ur; Chaudhry, Imran Sharif; Meo, Muhammad Saeed; Sheikh, Salman Maqsood; Idrees, Sadia

Asymmetric effect of FDI and public expenditure on population health: new evidence from Pakistan based on non-linear ARDL

2022

Rahman, Saif ur | Chaudhry, Imran Sharif | Meo, Muhammad Saeed | Sheikh, Salman Maqsood | Idrees, Sadia

The core purpose of the study is to examine the asymmetric effect of foreign direct investment (FDI) and population health (measured by life expectancy index). The study takes time series data for 1980–2020. The non-linear autoregressive distributed lag (NARDL) bound testing to cointegration approach is applied to scrutinize an asymmetric association among foreign direct investment, government expenditures, trade openness, public debt, and population health. The study also used an asymmetric causality test to investigate the causal association between the measured variables. The findings affirm that cointegration exists between the variables in the occurrence of asymmetries. The asymmetric causality outcomes confirm that only positive changes in FDI have bidirectional causality to life expectancy while negative shocks have unidirectional that runs from FDI to life expectancy. The government expenditure and foreign direct investment also provided evidence of social sector health welfare in Pakistan. The output shows that increasing government expenditure can cause an increase in life expectancy while decreasing government expenditure can cause a decrease in life expectancy. The study found that investment in health care medical services is paramount to better results as far as government assistance (welfare) gains. The outcomes of the study have given numerous policy suggestions to boost life expectancy in the general public of Pakistan.

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