Estimating dynamic interactive linkages among urban agglomeration, economic performance, carbon emissions, and health expenditures across developmental disparities

Abstract

This work analyzed the dynamic interactive causal links among urban agglomeration, economic performance, carbon emissions, and health expenditures across developmental disparities in China. To this end, this work developed a health expenditures-augmented growth model to introduce health expenditures and carbon emissions as a shift factor of total factor productivity. A block of simultaneous equations is developed based on the health expenditures-augmented growth modeling framework. The System-variant/Difference-variant Generalized Method of Moments is employed to estimate the block of simultaneous equations in order to deal with the potential endogeneity of the variables used. Based on empirical results, the core findings are as follows: first, a Pendroni cointegration-based long-run stable association is verified. Second, the urban agglomeration exhibited a bidirectional positive causal linkage with the gross domestic product (GDP) growth and health expenditures growth. Third, the health expenditures growth demonstrated a bidirectional positive causal linkage with carbon emissions growth and GDP growth. Fourth, a unidirectional mixed causal linkage—positive (negative) for linear form (squared form) of urban agglomeration—existed from urban agglomeration to carbon emissions growth. Fifth, there is a negative causal linkage operating from carbon emissions growth to GDP growth. However, there is mixed causal linkage—positive for a linear form of GDP growth, and negative for the squared form of GDP—operating from GDP growth to carbon emissions growth. These findings exhibited consistency in the type of causal linkages across the developmental disparities and hence showed robustness. Nevertheless, the findings showed disparities in the degree of impact across the developmental disparities. In this regard, the strength of causal linkage is the largest (moderate/lowest) for highly (moderately/least) developed regions of China. Based on empirical results, inferences are extracted and discussed.