The influence and mechanism of health expenditures on investment of financial assets decisions: A case study of China's economy

Abstract

Policymakers worldwide have been actively involved in the past few decades to ensure that human diseases are kept to a minimum. A new econometric technique, dynamic ARDL simulations, was used in this study to estimate and model the influence of health expenditures on investment in non-financial assets in China from 1990 to 2019. An economic growth framework, gross capital formation, information and communication technologies, foreign direct investment, and carbon emissions are all considered in the empirical model—the analysis produced interesting results. First, the estimates show that health expenditures and foreign direct investment have a significant long-run decreasing impact on non-financial assets in China by 0.451 and 0.234%. Second, economic growth and gross capital formation significantly affect the economy's non-financial assets. Likewise, ICT and carbon emissions also positively correlate with an explained variable in China. The findings show that the economy is becoming less investment-intensive as health spending and foreign direct investment rise. The study develops important policy implications for the selected country to achieve desired targets based on the empirical results.