Effect of Investment in Healthcare One Economic Development in Kenya
Journal of Investment and Management
Volume 7, Issue 1, February 2018, Pages: 25-34
Received: Jan. 9, 2018; Accepted: Feb. 24, 2018; Published: Apr. 2, 2018
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Authors
Jane Njoki Murango, Department of Finance & Accounting, KCA University, Nairobi, Kenya
Wabuyabo-Okonga B. M., Department of Finance & Accounting, KCA University, Nairobi, Kenya
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Abstract
Economic development can generally refer to an ikncrease in a country's ability to produce goods and services identified by factors such as production, income and spending. Investment in health in this way becomes a significant variable for economic growth or development since investments in different components of health can lead to improved human capital. Kenya has low investment in the health sector which may adversely affect economic development. The purpose of this study was to explore the effect of investment in health on the economic development in Kenya. The specific objectives were to investigate the effect of public investment in health, private investment and investment in health by international non-governmental organizations on the development of the economy of Kenya. A descriptive research design was used in this study. Secondary time series data for 32 years (1985-2016) was collected from Kenya National Bureau of Statistics (KNBS), Institute of Economic Affairs (EIA), World Bank, Ministry of Finance and Ministry of Devolution and Planning. Data analysis was conducted using Stata statistical software. VECM time series model was fitted to the data. Augmented Dickey Fuller unit root test and Johansen test of cointegration were conducted to ensure stationarity of the data. The study results suggested that both public investment in health (β = 0.1149; p < 0.05) and private investment in health sector (β = 0.2407; p < 0.05) have significant positive effect on economic development. The study results, however, showed that investment in health sector by INGOs have no significant effect on economic development in Kenya (β = 0.3232; p > 0.05). The study makes the following recommendations. First, the government should channel more funding to the health sector as the current funding of 3.4% of GDP falls below the 7% set by the Abuja Declaration in 2001. Secondly, private entities should be encouraged to increase their investment in the health sector in the country. Lastly, the ministry of health and other government stakeholders should partner with private health service providers and come up with a framework to ensure that private health sector increases its funding to fill up financial deficit health sector. This is because the research concluded that the private health has significant contribution to the overall performance of the health sector.
Keywords
Economic Development, Public Investment in Health, Private Investment in Health
To cite this article
Jane Njoki Murango, Wabuyabo-Okonga B. M., Effect of Investment in Healthcare One Economic Development in Kenya, Journal of Investment and Management. Vol. 7, No. 1, 2018, pp. 25-34. doi: 10.11648/j.jim.20180701.14
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Copyright © 2018 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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