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Does Scale and Efficiency of Government Health Expenditure Promote Development of the Health Industry?

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  • Mengying Wang

    (School of Statistics, Jiangxi University of Finance and Economics, No.169, East Shuanggang Road, Changbei, Nanchang 330013, China)

  • Stuart Gilmour

    (Graduate School of Public Health, St. Luke’s International University, 5th Floor, Omura Susumu and Mieko Memorial Chuo-ku, Tokyo 105-0045, Japan)

  • Chunhai Tao

    (School of Statistics, Jiangxi University of Finance and Economics, No.169, East Shuanggang Road, Changbei, Nanchang 330013, China)

  • Kaixuan Zhuang

    (School of Statistics, Jiangxi University of Finance and Economics, No.169, East Shuanggang Road, Changbei, Nanchang 330013, China)

Abstract

Macro-economic development of China’s health industry is essential to the sustainable development and growth momentum of the national economy. Strategies to promote the development and rebalancing of the industrial structure need to be improved in order to transform China’s health industry and drive development. Based on panel data of 25 regions in China from 2004 to 2016, this paper analyzes the linear and non-linear relationship between Chinese government health expenditure (GHE), GHE efficiency, and the macro-economic development of the health industry. It uses a novel index of industrial structure to measure the transformation of industrial sectors in China, based on a semi-parametric generalized additive model. The model shows that per capita GHE and its efficiency have a significant positive linear and comprehensive non-linear effect on the development of health industry structure. By analyzing the interaction of GHE and its efficiency, we show that high expenditure with low-efficiency regimes and high expenditure with high-efficiency regimes have a positive impact on the development of industrial structure. Following the empirical results, the paper puts forward corresponding policy suggestions for the role of fiscal policy in promoting the development of the health industry in China.

Suggested Citation

  • Mengying Wang & Stuart Gilmour & Chunhai Tao & Kaixuan Zhuang, 2020. "Does Scale and Efficiency of Government Health Expenditure Promote Development of the Health Industry?," IJERPH, MDPI, vol. 17(15), pages 1-19, July.
    • Handle: RePEc:gam:jijerp:v:17:y:2020:i:15:p:5529-:d:392421
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    References listed on IDEAS

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    Cited by:

    1. Caihua Zhou & Xinmin Zhang, 2020. "Measuring the Efficiency of Fiscal Policies for Environmental Pollution Control and the Spatial Effect of Fiscal Decentralization in China," IJERPH, MDPI, vol. 17(23), pages 1-19, December.
    2. Hongfeng Zhang & Chengyun Sun & Lu Huang & Hongyun Si, 2021. "Does Government Intervention Ensure Food Safety? Evidence from China," IJERPH, MDPI, vol. 18(7), pages 1-22, March.

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