Does Public Health Influence Economic Performance? Investigating the Role of Governance and Greener Energies for the Case of China

Abstract

In the last few decades, the world has faced some natural issues, due to which economic growth faces a severe threat. Natural disasters like pandemic outbreaks and man-made disasters like pollution emissions are very frequent in the current times, which also influenced the economic growth, where the institutes could play a primary role in economic growth stimulation. This study aims to analyze the association of public health expenditures, institutional quality, renewable energy, and economic performance in China. This study uses quarterly data covering the period from 1996Q1 to 2020Q4 and employs various time-series estimating approaches. The Augmented Dickey-Fuller estimates asserted that all the variables are stationary at first difference. Also, the Bayer-Hanck combined cointegration validates that all the variables are cointegrated. Employing the three long-run estimators, i.e., Fully Modified Ordinary Least Square, Dynamic Ordinary Least Square, and canonical cointegrating regression, the results asserted public health expenditures and institutional quality (including government efficiency and political stability) significantly enhances economic performance in China. Whereas two indicators of corruption control and regulatory quality do not play any significant role in promoting the economic performance of China. On the contrary, renewable energy is found negatively associated with economic performance. Also, the Pair-wise Granger causality validates mixed causal associations between the study variables. As a developing and fossil energy-dependent economy, this study provides relevant policy implications for maintaining economic growth and rebalancing economic performance in China.