Quality & Quantity

, Volume 48, Issue 4, pp 2295–2311 | Cite as

Role of health expenditure and ICT in a small island economy: a study of Fiji

Article
First Online:

Abstract

The economy of Fiji has witnessed a pervasive role of information and communications technology (ICT) on one hand and an increase in lifestyle diseases on the other. The government however has put in policies to exploit the gains from ICT and increased budget allocation to combat some of the burgeoning health problems in their effort to modernize the economy. In this paper, we explore the short-run and long run effects of health expenditure and ICT on per worker output within the augmented Solow framework (Q J Econ 70:65–94, 1956) and the autoregressive distributed lag bounds procedure (Pesaran et al. in J Appl Econ 16:289–326, 2001) over the period 1979–2010. The results show that health expenditure has a positive and significant effect in the short-run only (0.11 %). ICT has positive and significant effect both in the short-run (0.90 %) and the long-run (0.62 %). Further, the Granger-causality tests reveals a strong bi-directional causality between health expenditure and per worker output, a unidirectional strong causation from capital per worker to ICT development, and a weak causation from ICT to per worker output.

Keywords

Health ICT Growth ARDL bounds procedure  PICs Fiji 
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Notes

Acknowledgments

The authors sincerely thank the anonymous reviewers for their comments, the journal editor, and the Springer Correction Team.

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Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  1. 1.School of EconomicsUniversity of the South PacificSuvaFiji
  2. 2.School of Accounting and FinanceUniversity of the South PacificSuvaFiji

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