Spatial spillover effects of public health and education expenditures on economic growth: evidence from China’s provinces

ABSTRACT

This study examines the effects of public health and education expenditures on economic growth using a panel dataset of Chinese provinces from 1996 to 2015. Provincial and local governments in China assumed responsibility for public expenditures, which can be essential for promoting economic growth. Furthermore, this study employs a spatial autoregressive model to examine whether strategic spatial interaction exists between provinces and whether it has a positive spillover effect on economic growth. The estimated results show that strategic spatial interaction between provinces are positive and significant to growth. Additionally, the results show that health and education expenditure is positive and significant to growth. The results suggest further delegation of responsibility to provincial and local governments to fund productive public expenditure and encourage policies that focus on health and education reforms.

KEYWORDS:

• China
• public spending
• human capital
• public health
• education
• spillover

Disclosure statement

No potential conflict of interest was reported by the author.