The impact of financial development and environmental quality on health status: Evidence from the Middle East and North Africa (MENA) countries

Objective (s):

 Financial development is an important factor in economic growth and health. It not only directly but also indirectly affects the health status through the quality of the environment; Therefore, this study aimed to determine the impact of financial development and environmental quality on health status in MENA member countries.

A descriptive study was performed at international level for the MENA member countries. The panel data for the years 1990-2019 was extracted from the World Bank databases. Im, Pesaran and Shin (IPS) and Levin, Lin, and Chu (LLC) tests for stationary; Pedroni and Kao tests for co-integration and Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Least Squares (DOLS) estimators were used to analyze the data using the Eviews 10 software.

The mean (SD) life expectancy was 71.5 (5.05) years and the mean (SD) financial development index and carbon dioxide were 39.82 (25.09) and 81.91 (21.47) in the sample countries, respectively. The logarithm of financial development coefficient on logarithm of life expectancy in FMOLS and DOLS methods was equal to 0.02 and 0.03, respectively, and the logarithm of carbon dioxide coefficient in FMOLS and DOLS methods was -0.03 and -0.002, respectively. The logarithm of globalization in both methods had an effect coefficient of 0.30 on logarithm of life expectancy.

The expansion of financial development, globalization and GDP per capita had a positive effect and the increasing of carbon dioxide had a negative impact on health status. Therefore, policies to reduce environmental pollution and expand financial development and globalization seem necessary. In this regard, limiting the use of fossil fuels, replacing renewable energy, the use of air quality measuring instruments are proposed. It is also proposed to expand financial development in infrastructure, industries and technological services in the health sector and appropriate incentives for private sector investment.