Analysis of the Impact of External Debt on Health in an Emerging Asian Economy: Does FDI Matter?

Abstract

In this study, our main objective is to find the impact of FDI and external debt on health outcomes in emerging Asian economies from 1991 to 2019. To that end, we have collected data for seven economies: Bangladesh, Malaysia, Philippines, Thailand, Sri Lanka, China, and India. We have relied on the panel ARDL (PARDL) method for empirical analysis. The study's findings confirmed that the debt has increased infant mortality and decreased life expectancy in emerging Asian economies in the long run. On the other side, the FDI causes infant mortality to fall and life expectancy to rise in the long run in emerging Asian economies. Similarly, the health expenditures also reduced the infant mortality rate, though the impact is insignificant, and improved the life expectancy in emerging Asian economies. The causal analysis confirmed the two-way causality between health expenditure, infant mortality, and health expenditure and debt.

Does External Debt Promote Human Longevity in Developing Countries?

“…Empirically, the study showed that unsustainable, illiquid, and insolvent external debt and macroeconomic volatility shorten longevity in West African countries. Hence, longevity will decline when weak external debt management promotes poverty not just in West Africa but also in other developing countries, as reported in empirical studies (such as Loko et al, 2003); Saungweme and Mufandaedga, 2013;Zaghdoudi and Hakim, 2017;and Ma et al, 2022).…”

“…On the other hand, Ma et al (2022) tried to establish the effect of external indebtedness on health outcomes in the emerging economies of Sri Lanka, Bangladesh, India, Thailand, Malaysia, China and the Philippines. The study employed the panel ARDL methodology and concluded that external debt aggravates infant mortality and diminishes life expectancy in the examined countries in the long term.…”

Does External Debt Promote Human Longevity in Developing Countries? Evidence from West African Countries

“…The study observed that public and household debt contribute substantially to the standard of living in the country. Likewise, Ma et al ( 2022 ) tried to establish the effect of external indebtedness on health outcomes in the emerging economies of Sri Lanka, Bangladesh, India, Thailand, Malaysia, China and the Philippines. The study employed the panel ARDL methodology and concluded that external debt aggravates infant mortality and diminishes life expectancy in the examined countries in the long term.…”

The Role of Microfinance in China’s Rural Public Health: Evidence from the Anti-Poverty Microcredit Program

“…The results can vary greatly depending on how health is measured [ 57 ]. Most previous studies used two common proxies: premature mortality and life expectancy rates at birth [ 6 , 37 , 58 ]. However, these sample-level data cannot accurately measure the health level of the individual.…”

“…Furthermore, the causal pathway detected in existing studies varies [ 37 ]. The causation between debt and individual health is likely to run in both directions [ 35 ]: some measures of microcredit are found to affect health, whereas other measures of health are found to affect microcredit [ 27 ].…”