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The efficiency of government finanical expenditures before and during the COVID-19 pandemic: A cross-country investigation

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  • Van, Huong Vu
  • Van Dao, Le
  • Hoang, Lich Khac
  • Van Hien, Ngo

Abstract

This paper examines the way government spending affected productivity and its decomposition before and during the COVID-19 outbreak. Using panel data from 158 economies, the research shows that spending on health care increases productivity, while spending on the military slows down productivity and its decompositions. These effects are even greater in the context of COVID-19, showing that spending on health care and avoiding conflict and military escalation will be important for future economies to grow in a sustainable way.

Suggested Citation

  • Van, Huong Vu & Van Dao, Le & Hoang, Lich Khac & Van Hien, Ngo, 2023. "The efficiency of government finanical expenditures before and during the COVID-19 pandemic: A cross-country investigation," Finance Research Letters, Elsevier, vol. 54(C).
    • Handle: RePEc:eee:finlet:v:54:y:2023:i:c:s1544612323000715
    DOI: 10.1016/j.frl.2023.103697
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    More about this item

    Keywords

    Stochastic Frontier Analysis (SFA); Government financial expenditure; Total factor productivity (TFP);
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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