The Impact of Health Investment on Economic Growth: Evidence from China

Abstract

Background: Currently, China is carrying forward “Healthy China” construction. Thus, health investment has gradually become an important issue concerned by the Chinese government. Exploring the influence of health investment on economic growth under this background is of great theoretical and realistic significance for realizing economic transformation and upgrading in China. Methods: Thirty-one provincial regions in China were selected as research objects. Based on the panel data during 2000-2017, difference-generalized method of moment (D-GMM) and system-generalized method of moment (S-GMM) were comprehensively used to estimate the dynamic panel model from the national perspective, combining the fixed effects model (FE) estimation method to estimate the static panel model from the regional perspective, so as to investigate the relationships among governmental, residential health investment, and economic growth. Results: First, the governmental and residential health investments have positive effects on economic growth. Second, from the perspective of different regions, the governmental and residential health investments present positive correlations with economic growth, but the correlations present a progressively decreasing trend from the east to west. Conclusion: The Chinese government needs to steadily increase governmental health investment, elevate the level of residents' health expenditure, promote the development of the health industry, and finally facilitate sustainable economic growth in China.