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Testing the Social Cost of Rapid Economic Development in Malaysia: The Effect of Trade on Life Expectancy

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Abstract

The sheer size of industrializing economies’ echo rising health challenges, are we ignoring the darker side of economic development? Thus, this paper explores the impact of trade openness on life expectancy in Malaysia using time series data over the period of 1960–2014. We have applied structural break unit root and as well as cointegration tests to examine integrating properties of the variables and cointegration between the variables. The causal linkage between the variables is tested by applying the VECM Granger causality. The empirical evidence confirms the presence of cointegration amid the variables. Furthermore, economic growth increases life expectancy. Exports and imports have positive impact on life expectancy. The feedback effect exists between economic growth and life expectancy. Exports and imports cause life expectancy in Granger sense.

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Notes

  1. Rehman et al. (2014) empirically examined a relation between human capital formation, self-employment, and economic growth in the case of Pakistan. They reported a profound relationship between these indicators.

  2. Shahbaz et al. (2015) found that economic misery plays its significant role in determining life expectancy in Pakistan.

  3. Pesaran et al. (2001) have computed two asymptotic critical values—one when the variables are assumed to be I(0) and the other when the variables are assumed to be I(1).

  4. UNICEF (2011), http://www.unicef.org/malaysia/children_earlyyears.html.

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Authors and Affiliations

  1. Institute of Postgraduate Studies, University of Malaya, 50603, Kuala Lumpur, Malaysia

    Chong Hui Ling

  2. Sukkur Institute of Business Administration (IBA-Sukkur), Sukkur, Pakistan

    Khalid Ahmed

  3. Faculty of Business and Accountancy, University of Malaya, 50603, Kuala Lumpur, Malaysia

    Rusnah Muhamad

  4. Department of Management Sciences, COMSATS Institute of Information Technology, Lahore, Pakistan

    Muhammad Shahbaz

  5. Faculty of Economics, Accountancy and Management Sciences, Universiti Sultan Zainal Abidin, 21300, Kuala Terengganu, Terengganu, Malaysia

    Nanthakumar Loganathan

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  1. Chong Hui Ling
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  2. Khalid Ahmed
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  3. Rusnah Muhamad
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  4. Muhammad Shahbaz
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  5. Nanthakumar Loganathan
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Correspondence to Khalid Ahmed.

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Ling, C.H., Ahmed, K., Muhamad, R. et al. Testing the Social Cost of Rapid Economic Development in Malaysia: The Effect of Trade on Life Expectancy. Soc Indic Res 130, 1005–1023 (2017). https://doi.org/10.1007/s11205-015-1219-8

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