Financial development and health care expenditure in Sub Saharan Africa Countries

Figures & data

Table 1. Descriptive statistics

Variable	No. of Obs	Mean	Standard Dev	Min	Max
Broad money to GDP ratio (BroadMoney)	867	31.4	23.7	1.6	151.5
ATMs density per 100 000 (ATMS)	399	9.2	14.3	0	66.2
Commercial bank branches per 100 000 people (BankBranches)	482	5.5	8.2	0.1	54.8
Private bank credit GDP (BankPvt_credit)	868	16.9	16	0.2	108
Real GDP per capita (GDP)	920	1623.6	64.8	64.8	23,347.7
Tax revenue (%)	818	14.9	8.5	0.58	58.11
Population below 15 years (%)	917	42.7	5.17	19.8	50.4
Population over 65 years (%)	917	3.3	1.0	1.6	9.13
Health Expenditure per capita (US$)	912	174.3	220	5.9	1768.6
Public Health Expenditure to GDP (%)	912	2.4	12	0.04	9.0
Private Health Expenditure to GDP (%)	912	2.9	1.6	0.18	11.0
Level of education (%)	570	57.8	25.7	6.6	115

Table 2. Financial development and total health care expenditure per capita

Independent Variables	Fixed Effects Estimation
	Model 1	Model 2	Model 3	Model 4
logATMS	0.10** (0.04)	-	-	-
logBankBranches	-	0.09* (0.05)	-	-
logBroadMoney	-	-	0.35*** (0.07)	-
logBankPvt_credit	-	-	-	0.21*** (0.04)
log GDP per capita	0.06 (0.12)	0.26** (0.11)	0.39*** (0.05)	0.37*** (0.06)
logtax_revenue	0.27*** (0.07)	0.14* (0.08)	0.2* (0.1)	0.23** (0.1)
logU14	−2.5*** (0.88)	−2.6*** (1.1)	−0.79 (0.57)	−0.83 (0.71)
logover65	0.62 (0.71)	0.06 (0.78)	−0.17 (0.37)	0.18 (0.38)
Govt financed HS	−0.03 (0.074)	−0.04 (0.06)	0.0008 (0.039)	0.01 (0.03)
OOP financed HS	−0.12** (0.06)	−0.1** (0.42)	−0.07 (0.04)	0.09 (0.04)
Constant	12.3*** (3.7)	12.4*** (4.6)	3.16**** (2.3)	3.9*** (2.9)
R-squared	0.5	0.5	0.66	0.66
Number of Countries	43	44	46	46
Number of Observation	345	438	753	754

Standard errors in parenthesis, ***, **, * shows significance at 1%, 5% and 10%

Table 3. Financial development and total health care expenditure per capita: A 2SLS approach

Independent Variables	Two Stage Least Squares Estimation
	Model 5	Model 6	Model 7	Model 8
logATMS	0.19*** (0.06)	-	-	-
logBankBranches	-	0.25** (0.12)	-	-
logBroadMoney	-	-	0.57*** (0.18)	-
logBankPvt_credit	-	-	-	0.72** (0.32)
logGDP_capita	−0.12 (0.15)	0.10 (0.13)	0.31*** (0.06)	0.15 (0.17)
logtax_revenue	0.30*** (0.05)	0.07 (0.07)	0.12 (0.13)	−0.24 (0.33)
logU14	−2.43*** (0.84)	−2.25** (1.0)	−1.33** (0.57)	−0.70 (0.8)
logover65	0.74 (0.76)	0.23 (0.83)	−0.06 (0.34)	0.08 (0.49)
Govt financed HS	−0.01 (0.07)	−0.002 (0.06)	0.003 (0.03)	0.05 (0.03)
OOP financed HS	−0.13** (0.05)	−0.10 (0.04)	−0.01 (0.04)	−0.01 (0.06)
Number of Countries	43	43	45	45
Number of Observation	333	416	551	551
Hansen J test (p-value)	0.66	0.17	0.099	0.29
Craig-Donald Wald F Statistic	119.4	73.8	49.4	11.0
Instrumental Variables	Perceived rule of law, Populations with mobile phones

Standard errors in parenthesis, ***, **, * shows significance at 1%, 5% and 10%

Table 4. Financial development and public health care expenditure to GDP

Independent Variables	Random and Fixed Effects Estimation
	RE Model 9	RE Model 10	FE Model 11	FE Model 12
logATMS	0.06* (0.03)	-	-	-
logBankBranches	-	0.06 (0.04)	-	-
logBroadMoney	-	-	0.41*** (0.07)	-
logBankPvt_credit	-	-	-	0.23*** (0.06)
log GDP per capita	−0.14*** (0.05)	−0.07 (0.05)	−0.05 (0.05)	−0.06 (0.05)
logtax_revenue	0.4*** (0.1)	0.33*** (0.11)	0.25 (0.17)	0.28* (0.15)
logU14	−1.0 (0.67)	−1.0 (0.71)	0.25 (0.56)	−0.3 (0.73)
logover65	−0.65* (0.39)	−0.8* (0.43)	0.41 (0.38)	0.43 (0.38)
Govt financed HS	0.32*** (0.8)	0.32*** (0.07)	0.31*** (0.04)	0.32 (0.04)
OOP financed HS	−0.28*** (0.06)	−0.25*** (0.05)	−0.28*** (0.04)	0.3 (0.04)
Constant	5.18*** (3.0)	5.3*** (3.1)	0.45 (2.5)	0.47 (0.04)
R-squared	0.41	0.36	0.43	0.43
Number of Countries	43	44	46	46
Number of Observation	345	438	753	754
Breusch Pagan LM test (p-value)	0.00	0.00	-	-

Standard errors in parenthesis, ***, **, * shows significance at 1%, 5% and 10%

Table 5. Financial development and public health care expenditure to GDP-2SLS

Independent Variables	Two Stage Least Squares Estimation
	Model 13	Model 14	Model 15	Model 16
logATMS	0.07 (0.04)	-	-	-
logBankBranches	-	0.14 (0.11)	-	-
logBroadMoney	-	-	0.26* (0.15)	-
logBankPvt_credit	-	-	-	0.33* (0.19)
log GDP per capita	−0.18*** (0.07)	−0.12* (0.06)	−0.06 (0.05)	−0.13 (0.09)
logtax_revenue	0.42*** (0.1)	0.29*** (0.13)	0.4 (0.24)	0.23 (0.27)
logU14	−1.0** (0.67)	−0.87 (0.73)	−0.69 (0.64)	−0.4 (0.78)
logover65	0.62 (0.39)	−0.7 (0.43)	0.22 (0.42)	0.23 (0.49)
Govt financed HS	0.32*** (0.08)	0.35*** (0.07)	0.36 (0.04)	0.39 (0.49)
OOP financed HS	−0.29*** (0.05)	−0.24*** (0.05)	−0.27 (0.05)	−0.29 (0.05)
R-squared	0.41	0.41	0.45	0.43
Number of Countries	43	43	45	45
Number of Observations	333	333	551	551
Hansen J test (p-value)	0.57	0.31	0.9	0.88
Craig-Donald Wald F Statistic	19.93	19.93	49.4	11.0
Instrumental Variables	Perceived rule of law, Populations with mobile phones

Standard errors in parenthesis, ***, **, * shows significance at 1%, 5% and 10%

Table 6. Financial development and private health care expenditure to GDP

Independent Variables	Random and Fixed Effects Estimation
	Model 17	Model 18	Model 19	Model 20
logATMS	0.05 (0.04)	-	-	-
logBankBranches	-	0.11** (0.05)	-	-
logBroadMoney	-	-	0.17*** (0.05)	-
logBankPvt_credit	-	-	-	0.1* (0.05)
log GDP per capita	−0.19 (0.11)	−0.17* (0.09)	−0.06 (0.05)	−0.06 (0.06)
Loged	0.01 (0.09)	0.002 (0.08)	0.01 (0.07)	0.02 (0.07)
logU14	−1.1** (0.52)	−1.0* (0.5)	0.58 (0.73)	0.46 (0.7)
logover65	1.6** (0.81)	1.27 (0.82)	0.19 (0.3)	0.55 (0.41)
Govt financed HS	−0.24** (0.1)	−0.2** (0.04)	−0.16*** (0.03)	−0.11*** (0.03)
OOP financed HS	0.05 (0.06)	0.06 (0.05)	0.08** (0.04)	0.07* (0.04)
Constant	4.6* (2.3)	4.5** (2.1)	−1.0 (3.3)	−1.37 (3.3)
R-squared	0.22	0.19	0.11	0.12
Number of Countries	45	46	46	46
Number of Observation	245	306	753	754

Standard errors in parenthesis, ***, **, * shows significance at 1%, 5% and 10%

Table 7. Financial development and private health expenditure to GDP-2SLS

Independent Variables	Two Stage Least Squares Estimation
	Model 21	Model 22	Model 23	Model 24
logATMS	0.28*** (0.07)	-	-	-
logBankBranches	-	0.37** (0.14)	-	-
logBroadMoney	-	-	0.32** (0.15)	-
logBankPvt_credit	-	-	-	0.34** (0.16)
logGDP_capita	−0.5*** (0.13)	−0.33* (0.13)	−0.06 (0.06)	−0.13* (0.07)
Loged	0.45*** (0.22)	−0.09 (0.1)	0.07 (0.09)	−0.09 (0.11)
logU14	−1.0** (0.54)	−0.89 (0.51)	0.22 (0.64)	0.5 (0.77)
logover65	2.0*** (0.76)	1.4* (0.81)	0.81** (0.41)	0.85 (0.41)
Govt financed HS	−0.2.4*** (0.08)	−0.17** (0.07)	−0.14*** (0.04)	−0.12*** (0.03)
OOP financed HS	0.001*** (0.06)	−0.07 (0.05)	0.05 (0.04)	0.06 (0.06)
Number of Countries	44	45	45	45
Number of Observation	243	299	398	398
Hansen J test (p-value)	0.70	0.87	0.20	0.42
Cragg-Donald Wald F Statistic	31.5	73.8	49.4	11.0
Instrumental Variables	Perceived rule of law, Populations with mobile phones

Standard errors in parenthesis, ***, **, * shows significance at 1%, 5% and 10%

Table A1. Panel unit root test

Variable	Fisher Type ADF Test	Result
	Model with trend
logATMS	231.9***	I(0)
logBankBranches	150.6***	I(0)
logBankPvt_credit	118.5**	I(0)
logBroadMoney	110.4**	I(0)
logGDP_capita	123.8***	I(0)
logTHE_capita	172.5***	I(0)
logPubHE2GDP	129.5***	I(0)
logPvtHE2GDP	143.7***	I(0)
Logtax	158.3****	I(0)
logover65	157.2***	I(0)
logU15	186.2***	I(0)

***, **, * shows significance at 1%, 5% and 10%

Table A2. Cross-sectional dependency test

Dependent Variable	Independent explanatory variables	CD Test p-value
LogTHE_capita	logFINDEV logGDP_capita, logu14 logover65 oop_financed pub_financed	22.69 (0.00)
LogTHE_capita	logATMs logGDP_capita, logtax logu14 logover65 oop_financed pub_financed	-
LogTHE_capita	logBankBranches logGDP_capita, logtax logu14 logover65 oop_financed pub_financed	−0.243 (0.808)
LogTHE_capita	logBroadMoney logGDP_capita, logtax logu14 logover65 oop_financed pub_financed	3.752 (0.00)
LogTHE_capita	logBankPvt_credit logGDP_capita, logtax logu14 logover65 oop_financed pub_financed	4.11 (0.000)
LogTHE2GDP	logFINDEV logGDP_capita, logu14 logover65 oop_financed pub_financed	16.22 (0.105)
LogTHE2GDP	logATMs logGDP_capita, logtax logu14 logover65 oop_financed pub_financed	-
LogTHE2GDP	logBankBranches logGDP_capita, logtax logu14 logover65 oop_financed pub_financed	−0.656 (0.512)
LogTHE2GDP	logBroadMoney logGDP_capita, logtax logu14 logover65 oop_financed pub_financed	−0.661 (0.509)
LogTHE2GDP	logBankPvt_credit logGDP_capita, logtax logu14 logover65 oop_financed pub_financed	0.185 (0.853)
LogPVT2GDP	logFINDEV logGDP_capita, logu14 logover65 oop_financed pub_financed	1.219 (0.223)
LogPVT2GDP	logATMs logGDP_capita, logtax logu14 logover65 oop_financed pub_financed	-
LogPVT2GDP	logBankBranches logGDP_capita, logtax logu14 logover65 oop_financed pub_financed	−0.207 (0.836)
LogPVT2GDP	logBroadMoney logGDP_capita, logtax logu14 logover65 oop_financed pub_financed	−1.188 (0.235)
LogPVT2GDP	logBankPvt_credit logGDP_capita, logtax logu14 logover65 oop_financed pub_financed	−0.653 (0.514)

Table A3. Financial development index and health care expenditure

	Fixed Effects Estimation			2SLS Estimation
Independent Variables	Total Health Expenditure per capita	Public Health Expenditure to GDP	Private Health Expenditure to GDP	Total Health Expenditure per capita	Public Health Expenditure to GDP	Private Health Expenditure to GDP
logFindex	0.18*** (0.02)	−0.278*** (0.0920)	0.003 (0.07)	2.0*** (0.339)	2.17** (0.88)	−0.847 (0.728)
log GDP per capita	2.0*** (0.07)	−0.463 (0.474)	−0.21 (0.20)	1.315*** (0.211)	−1.21*** (0.43)	−0.04 (0.23)
logtax_revenue	-	-	−0.08 (0.09)	-	−0.49 (0.94)	0.07 (0.15)
logU14	−1.93*** (0.26)	−2.389 (1.998)	1.20 (1.13)	0.547 (0.733)	−0.49 (0.79)	0.54 (0.76)
logover65	−0.17 (0.18)	0.885 (1.368)	0.72 (0.51)	−0.008 (0.087)	0.74* (0.42)	0.834*** (0.277)
Govt financed HS	0.04 (0.04)	0.195 (0.164)	−0.06 (0.04)	0.532 (0.481)	0.21 (0.18)	−0.07 (0.04)
OOP financed HS	−0.09 (0.06)	−0.083 (0.139)	0.05 (0.05)	−0.0101 (0.0902)	−0.138 (0.126)	0.06 (0.05)
Constant	−2.46** (0.99)	12.28 (9.305)	0.23 (5.4)
R-squared	0.42	0.05	0.20
Number of Countries	43	43	43	43	43	42
Number of Observation	635	635	463	333	266	429
Hansen J test (p-value)				0.57	0.44	0.26
Craig-Donald Wald F Statistic				19.93	19.93	19.93
Instrumental Variables				Perceived rule of law, Populations with mobile phones