Testing the Social Cost of Rapid Economic Development in Malaysia: The Effect of Trade on Life Expectancy

The sheer size of industrializing economies’ echo rising health challenges, are we ignoring the darker side of economic development? Thus, this paper explores the impact of trade openness on life expectancy in Malaysia using time series data over the period of 1960–2014. We have applied structural break unit root and as well as cointegration tests to examine integrating properties of the variables and cointegration between the variables. The causal linkage between the variables is tested by applying the VECM Granger causality. The empirical evidence confirms the presence of cointegration amid the variables. Furthermore, economic growth increases life expectancy. Exports and imports have positive impact on life expectancy. The feedback effect exists between economic growth and life expectancy. Exports and imports cause life expectancy in Granger sense.