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Trade Liberalization’s Influence on Health Status in Developing Economies: Theoretical Insights and Real-World Implications

Author

Listed:
  • Chatterjee, Tonmoy

    (Bhairab Ganguly College, India)

  • Dinda, Soumyananda

    (University of Burdwan, India)

  • Chatterjee, Nilendu

    (Bankim Sardar College, India)

  • Teame, Ghirmai Tesfamariam

    (College of Business and Social Sciences, Eritrea)

Abstract

This paper examines the health status of developing nations in the context of liberalization. In the existing literature, trade openness and foreign direct investment (FDI) are often considered substitutes, with one being prioritized over the other to address health issues in developing countries (Chatterjee et al., 2022). Our study presents new evidence by viewing trade openness and FDI as complementary. Theoretically, we use a general equilibrium trade model based on the Heckscher-Ohlin-Samuelson-Venak framework, while static and dynamic panel data approaches are applied empirically. Our sample includes 51 developing countries across Asia, Africa, and Latin America from 1980 to 2019. The findings provide policy recommendations that emphasize trade liberalization to improve health outcomes, particularly life expectancy and infant mortality. Additionally, health-specific trade liberalization is suggested for African and Latin American nations, as economic growth through liberalization can strengthen domestic health infrastructure.

Suggested Citation

  • Chatterjee, Tonmoy & Dinda, Soumyananda & Chatterjee, Nilendu & Teame, Ghirmai Tesfamariam, 2024. "Trade Liberalization’s Influence on Health Status in Developing Economies: Theoretical Insights and Real-World Implications," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 49(3), pages 1-31, September.
    • Handle: RePEc:ris:jecdev:0091
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    References listed on IDEAS

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    More about this item

    Keywords

    Health Status; Foreign Direct Investment; Openness; International Trade; Panel Data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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