Accounting for Contribution of Trade Openness and Foreign Direct Investment in Life Expectancy: The Long-Run and Short-Run Analysis in Pakistan

Abstract

This paper examines the impact of trade openness and foreign direct investment (FDI) on life expectancy using time series data over the period of 1972-2013. We have applied structural break unit root as well as cointegration tests to examine integrating properties of the variables and cointegration among the variables. The causal linkage between the variables has been tested by applying the VECM Granger causality. The empirical evidence confirms the presence of cointegration amid the variables. Moreover, trade openness and FDI increase population health measured by life expectancy in the long-run. Furthermore, the analysis suggests that trade openness and FDI cause life expectancy in the short-run. These findings have several policy implications to improve life expectancy for the people of Pakistan in particular and other developing countries in general.

Analyzing the impacts of global trade and investment on non-communicable diseases and risk factors: a critical review of methodological approaches used in quantitative analyses

“…Across studies, the same indicators were used to represent different constructs. Total trade relative to GDP was used as a measure of trade openness [ 45 , 50 ], trade liberalization [ 29 , 47 ], and economic globalization [ 51 ]; FDI was used as a measure of globalization [ 46 ] and “market integration” [ 52 ]. The various globalization and macroeconomic indices conflate trade and investment, precluding any disentanglement of these effects.…”

“…The various globalization and macroeconomic indices conflate trade and investment, precluding any disentanglement of these effects. Only four studies considered both trade and investment as separate explanatory indicators [ 20 , 23 , 24 , 50 ].…”

Natural‐resource dependence and life expectancy: A nonlinear relationship

“…Because recent studies have found that international integration improves health outcomes (Alam, Raza, Shahbaz, & Abbas, ; Burns, Jones, Goryakin, & Suhrcke, ; Herzer, ; Majeed, ), we include the sum of trade and FDI as a share of GDP to assess the link between integration and life expectancy. In line with Nagel, Herzer, and Nunnenkamp (), we find that the relationship between global integration and health is inconclusive (Column 3).…”

Dynamic Relationship between Urbanization, Energy Consumption and Environmental Degradation in Pakistan: Evidence from Structure Break Testing

“…For this purpose, we check the stability of the coefficients governing the long-run relationship by using the rolling window estimation method with the window size of 10 years (M. S. Alam, Raza, Shahbaz, & Abbas, 2015;Raza, Shahbaz, & Paramati, 2016). Figure 3 and Table 11 report the evolution of the coefficients associated with GDP, population, energy consumption and urbanization throughout the sample.…”