Abstract
This is the first study in the single country studies that analyze the relationship between life expectancy, short-term external debt, and long-term external debt for Turkey for the period from 1974 to 2017. This study analyzed the direct effect of long-term debt and short-term debt on life expectancy in Turkey. General tendency in the literature is to analyze the relationship between growth and life expectancy. According to the results in this study, long run relationship is confirmed between the variables. The causal relationship is found from life expectancy to long-term debt and short-term debt but no causal relationship is found from long-term debt and short-term debt to life expectancy. The reason behind this result may result from that Turkey’s increasing life expectancy leads to population increase and the increase in population leads to the increase in the construction of new buildings. For the last 20 years, Turkey started to renew its construction infrastructure and at the same time establishing new buildings for its increasing population. Resulting from that, Turkey needed funding to fund its investments, and it currently is, and there has been a gap between investments and savings in Turkey. Turkey may have used external debt to fund the gap between investments and savings. This article recommends further analysis for the direct relationship between external debt and life expectancy for developing countries.
Highlights
The aim of this study is to analyze the effect of long term external debt (EXTL) and short term external debt (EXTS) on life expectancy (LEP) through foreign direct investment (FDI) following the study of Alam et al, (2016) for Pakistan
Raza, Shahbaz and Abbas confirmed that FDI and trade openness (TO) had positive impact on LEXP and there was unidirectional causality running from FDI and TNP to LEP in the short run in Pakistan for the period 1972 to 2013
H1: There is significant and positive impact of EXTL on LEP in Turkey H2: There is significant and positive impact of EXTS on LEP in Turkey H3: There is unidirectional causality running from EXTL to LEP in Turkey H4: There is unidirectional causality running from EXTS to LEP in Turkey H5: There is unidirectional causality running from LEP to EXTL in Turkey H6: There is unidirectional causality running from LEP to EXTS in Turkey
Summary
The aim of this study is to analyze the effect of long term external debt (EXTL) and short term external debt (EXTS) on life expectancy (LEP) through foreign direct investment (FDI) following the study of Alam et al, (2016) for Pakistan. There is a research gap in the literature for analyzing the relationships between LEP, EXTL and EXTS for developing countries. The contribution of this study is that it is the first study that analyzes relationships between LEP, EXTL and EXTS for Turkey. This study breaks down external debt (EXT) into EXTS and EXTL and examines the direct effect of EXT on LEP through FDI for Turkey for the period 1974-2017. For similar studies in the literature Saungweme and Mufandaedza (2013) examined the relationship between external debt (ET) and poverty for Zimbabwe for the period 1980 to 2012. Following hypotheses are examined in order to investigate the relationships between LEP, LEXTL and LEXTS
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