Effects of Health Capital on Productivity and Export: In the Wake of International Economic Integration
Effects of Health Capital on Productivity and Export: In the Wake of International Economic Integration

Summary/Abstract: Employing Arellano-Bond Dynamic Panel GMM estimators of 106 countries, this paper investigates the importance of health capital (life expectancy at birth) on benefits from international economic integration. It finds a significant positive impact of health capital on economic performance through the improvement in labor productivity for countries with greater trade openness. Although health capital significantly accelerates the impact of trade openness on labor productivity in low-income economies, the opposite is the case for upper mid- and high-income economies. Further, health capital decelerates the impact of financial openness in low-income economies on productivity, whereas accelerates the influence of financial openness on productivity in high-income economies. However, no significant relationship is found between health capital and the rate of export performance. It also does not influence openness variables on the rate of export performance. Interestingly, improvement of life expectancy at birth strengthens the rate of export performance until income growth slows.

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