Rapid rise of life expectancy in Bangladesh: Does financial development matter?

Abstract

AbstractThis paper investigates the role of financial development in the rapid rise of life expectancy in Bangladesh by using the annual data covering the period of 1972–2013. We examine the unit root properties of the variables employing a structural break unit root test. The combined cointegration and ARDL bounds testing approach confirm the long‐run association between financial development and life expectancy in the presence of globalization, income inequality, and economic growth. The long‐run elasticities indicate that financial development and globalization (income inequality and economic growth) positively (negatively) affect life expectancy in Bangladesh. The VECM Granger causality analysis indicates that the feedback effect exists between financial development and life expectancy, and income inequality and life expectancy. Economic growth and globalization are also found to Granger cause life expectancy. Our findings offer new insights to policy makers which are crucial to improve life expectancy in Bangladesh.