The Effects of Trade Liberalization on the Mortality Rate in Provinces of Iran: Panel Co-Integration with Cross-Section Dependence

One of the main challenges in health sector is the health business and an answer to the question of whether trade liberalization is beneficial for health. Accordingly, the present study examines the relationship between trade liberalization and mortality rate (as a basic indicator of health) using panel data of the provinces of Iran over the period 2002-2012. For this purpose, this study uses a panel co-integration analysis with cross-section dependence and continuously-updated and fully-modified (Cup-FM) estimator. The results show that trade liberalization has a negative and significant effect on the mortality rate in the provinces of Iran. In addition, the interaction between trade liberalization and per capita income is of positive sign and statistically significance. The finding indicates the mitigation of a part of decreasing effect of trade liberalization on mortality rate in this case study