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The purpose of this paper, on Portugal, is to determine the economic effects of public and private capital spending on health.

The authors use a vector autoregressive model to estimate the elasticities and marginal products of health care investments in Portugal on investment, employment and output.

Every €1m invested in health care yields significant positive spillover effects, boosting investment and GDP by €24.74 and €20.45m, respectively, creating 188 net jobs. Adversely, net exports deteriorate, as new capital goods are imported. While only 28.2 percent of the total accumulated increase in GDP occurs within a year, investment is front loaded with a corresponding 73.8 percent. Over this period, 68 workers are displaced for every €1m invested. At a disaggregated level, real estate, construction, and transportation and storage are industries where output shares increase the most. Employment shares increase the most in professional services, construction and basic metals.

This paper adds to the empirical literature, corroborating, for example, Rivera and Currais (1999a) and McDonald and Roberts (2002) in that health care spending can have a very significant effect on macroeconomic aggregates. In addition to the analysis of the tradable/non-tradable divide, it adds two further novelties by discussing industry-specific effects on economic performance and the distinction between effects on impact and those over the longer term.

As policy implications, health investments have very significant long-term economic performance effects, but are unhelpful counter cyclically. Also, they will change the industry mix: construction and professional services are the non-traded industries that will benefit the most, while the traded industries of non-metallic minerals, basic metals, and machinery and equipment benefit much less.

Given that capital spending on health boosts economic performance, especially in the long run, it ought to be a part of Portugal’s medium-to-long-term growth strategy. Also, if these projects depress economic activity in the short run, and are thus unhelpful counter cyclically, the timing of when they are launched matters. Furthermore, following a health investment, policies that boost net exports will be required to ensure trade balance.

The originality of this paper is to estimate, in a dynamic framework, the aggregate and industry-specific elasticities and marginal products on investment, employment and output, allowing the identification of effects both on impact and over the long term. Although health care investments are expected to have important macroeconomic effects, they need not be evenly distributed across industries.

Empirical studies show that years of schooling are positively correlated with good health. The implication may go from education to health, from health to education, or from factors that influence both variables. We formalize a model that determines an individual’s demand for knowledge and health based on the causal effects, and study the impacts on the individual’s decisions of policy instruments such as subsidies on medical care, subsidizing schooling, income tax reduction, lump-sum transfers, and improving health at young age. Our results indicate that income redistribution policies may be the best instrument to improve welfare, while a medical care subsidy is the best instrument for longevity. Subsidies to medical care or education would require large imperfections in these markets to be more welfare improving than distributional policies.

This article investigates the dynamic implication of healthcare expenditure on economic growth in the selected ten Sub-Saharan African countries over the period 2000–2018.

The study methodology included dynamic heterogenous panel, using mean group and pooled mean group estimators. The investigation of the healthcare expenditure and economic growth nexus was achieved while controlling the effects of investment, savings, labor force and life expectancy via interaction terms.

The results from linear healthcare expenditure have a significant positive impact on economic growth, while the nonlinear estimates through the interaction terms between healthcare expenditure and investment have a negative statistically significant impact on growth. The marginal effect of healthcare expenditure evaluated at the minimum and maximum level of investment is positive, suggesting the impact of health expenditure on growth does not vary with the level of investments. This result responds to the primary objective of the article.

In policy terms, the impact of investment on healthcare is essential to addressing future health crises. The impact of coronavirus disease 2019 (COVID-19) can never be separated from the shortages or low prioritization of health against other sectors of the economy. The article also provides an insight to policymakers on the demand for policy reform that will boost and make the health sector attractive to both domestic and foreign direct investment.

Given the vulnerability of SSA to the health crisis, there are limited studies to examine this phenomenon and first to address the needed investment priorities to the health sector infrastructure in SSA.

Despite major progress made in improving the health and well-being of millions of people, more efforts are needed for investment in 21st century health care. However, public hospital waiting lists continue to grow. At the same time, there has been increased investment in e-health and digital interventions to enhance population health and reduce hospital admissions. The purpose of this study is to highlight the accounting challenges associated with measuring, investing and accounting for value in this setting. The authors argue that this requires more nuanced performance metrics that effect a shift from a technical practice to one that embraces social and moral values.

This research is based on field interviews held with clinicians, accountants and administrators in public hospitals throughout Australia and Europe. The field research and multidisciplinary narratives offer insights and issues relating to value and valuing and managing digital health investment decisions for the post-COVID-19 “value-based health-care” future of accounting in the hospital setting.

The authors find that the complex activity-based hospital funding models operate as a black box, with limited clinician understanding and hybridised accounting expertise for informed social, moral and ethical decision-making. While there is malleability of the health economics-derived activity-based hospital funding models, value contestation and conflict are evident in the operationalisation of these models in practice. Activity-based funding (ABF) mechanisms reward patient throughput volumes in hospitals but at the same time stymie investment in digital health. Although classified as strategic investments, there is a limit to strategic planning.

Accounting in public hospitals has become increasingly visible and contested during the pandemic-driven health-care crisis. Further research is required to examine the hybridising accounting expertise as it is increasingly implicated in the incremental changes to ABF in the emergence of value-based health care and associated digital health investment strategies. Despite operationalising these health economic models in practice, accountants are currently being blamed for dysfunctional health-care decisions. Further education for practicing accountants is required to effect operational change. This includes education on the significant moral and ethical dilemmas that result from accounting for patient mix choices in public hospital service provision.

This research involved a multidisciplinary team from accounting, digital health, information systems, value-based health care and clinical expertise. Unique insights on the move to digital health care are provided. This study contributes to policy development and the limited value-based health-care literature in accounting.

This survey explores the application of real options theory to the field of health economics. The integration of options theory offers a valuable framework to address these challenges, providing insights into healthcare investments, policy analysis and patient care pathways.

This research employs the real options theory, a financial concept, to delve into health economics challenges. Through a systematic approach, three distinct models rooted in this theory are crafted and analyzed. Firstly, the study examines the value of investing in emerging health technology, factoring in future advantages, associated costs and unpredictability. The second model is patient-centric, evaluating the choice between immediate treatment switch and waiting for more clarity, while also weighing the associated risks. Lastly, the research assesses pandemic-related government policies, emphasizing the importance of delaying decisions in the face of uncertainties, thereby promoting data-driven policymaking.

Three different real options models are presented in this study to illustrate their applicability and value in aiding decision-makers. (1) The first evaluates investments in new technology, analyzing future benefits, discount rates and benefit volatility to determine investment value. (2) In the second model, a patient has the option of switching treatments now or waiting for more information before optimally switching treatments. However, waiting has its risks, such as disease progression. By modeling the potential benefits and risks of both options, and factoring in the time value, this model aids doctors and patients in making informed decisions based on a quantified assessment of potential outcomes. (3) The third model concerns pandemic policy: governments can end or prolong lockdowns. While awaiting more data on the virus might lead to economic and societal strain, the model emphasizes the economic value of deferring decisions under uncertainty.

This research provides a quantified perspective on various decisions in healthcare, from investments in new technology to treatment choices for patients to government decisions regarding pandemics. By applying real options theory, stakeholders can make more evidence-driven decisions.

Decisions about patient care pathways and pandemic policies have direct societal implications. For instance, choices regarding the prolongation or ending of lockdowns can lead to economic and societal strain.

The originality of this study lies in its application of real options theory, a concept from finance, to the realm of health economics, offering novel insights and analytical tools for decision-makers in the healthcare sector.

The paper investigates into the human capital–economic growth nexus by arguing that investment in early education and health helps in achieving higher economic growth. Early investment in human capital matters most for economic growth than the increase in human capital over the years.

A dynamic vector error correction model (VECM) together with the impulse response function and variance decomposition are used on data for Mauritius from 1983 to 2019. The paper distinguishes between the short-run and the long-run effects of human capital measured by the pupil–teacher ratio in pre-primary education and life expectancy at birth.

This study’s findings reveal that investment in early education and health has contributed positively to growth performance. There is evidence for long-run growth effects arising from a positive shock in the education and health indicators.

This paper contributes to both the theoretical and empirical literature on the human capital–growth nexus. Mauritius as a natural resource poor small economy is an important case study as it has started early in investing in its people to promote economic growth.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-11-2021-0674.

We explore what health-capital theory has to offer in terms of informing and directing research into health inequality. We argue that economic theory can help in identifying mechanisms through which specific socioeconomic indicators and health interact. Our reading of the literature, and our own work, leads us to conclude that non-degenerate versions of the Grossman (1972a, 1972b) model and its extensions can explain many salient stylized facts on health inequalities. Yet, further development is required in at least two directions. First, a childhood phase needs to be incorporated, in recognition of the importance of childhood endowments and investments in the determination of later-life socioeconomic and health outcomes. Second, a unified theory of joint investment in skill (or human) capital and in health capital could provide a basis for a theory of the relationship between education and health.

The study examines the impact of socio-economic governance on economic growth in Nigeria. It measures socio-economic governance from the perspective of fiscal policy, using indicators such as investment in education, research and development (R&D) and health.

This study employs the Autoregressive Distributive Lag (ARDL) Bound Testing method to achieve its objective.

The study finds that socio-economic policies aimed at increasing investment in education are crucial for Nigeria’s long-term economic growth. Additionally, investment in R&D positively impacts economic growth. However, the study reveals that investment in health negatively affects economic growth in Nigeria in the long run. This suggests that if a country overinvests in health, it may divert resources from other vital sectors such as education, infrastructure and R&D, which can hinder overall economic growth. The short-run parameter is, however, not statistically significant in this study.

The study’s originality lies in its exploration of the relationship between socio-economic governance and economic growth in Nigeria, specifically from a fiscal policy perspective. It highlights the importance of investing in education and R&D for long-term economic growth. Additionally, the finding that overinvestment in health may have a negative impact on long-term economic growth provides valuable insight for policymakers in Nigeria and other developing countries. Overall, this study’s findings can be beneficial for policymakers and researchers interested in the intersection between socio-economic governance and economic growth in developing countries.

The purpose of this paper is to examine empirically the sources of economic growth based on an augmented Mankiw, Romer, and Weil's model which considers human capital in the forms of both health and education for a group of East Asian economies including China.

Empirical results are based on the analysis of a panel dataset from 1961 to 2007. Sub‐sample estimation for the post‐1997 Asian Financial Crisis period is also considered for comparison purposes.

The impact of the stock of health and education on economic growth is statistically significant for both the whole sample and sub‐sample period. However, the impact of investment in education on economic growth is a little “fragile”. The statistical results show that the statistical impact of health on economic growth is stronger than that of education. It seems that it is more plausible for the policymakers in East Asia to invest more in health than educational human capital.

This paper is one of the first empirical studies to analyze the effect of human capital in the form of both health and education on economic growth in East Asia.

Impact investing, Social entrepreneurship.

MBA, EMBA, Executive Education.

CareCross Health describes the impact due diligence leading up to an investment into CareCross Health by impact investor Palm Capital. The case follows the protagonist, Caitlin Stevens, CEO of Palm Capital, as she identifies CareCross Health as a potential investment target, performs an initial screening of the company and visits the company and its sites as part of an in-depth impact due diligence.

By the end of this case, the student should be able to consider the critical steps associated with conducting an impact due diligence; understand the challenges associated with conducting an impact due diligence, with a particular focus on due diligence in an emerging market scenario; analyse a potential impact investment, in this case CareCross Health, and make a preliminary recommendation on whether the investment is viable from an impact perspective; identify the trade-offs between private sector and public sector provision of services to low-income groups, and consider unintended consequences in analysing the impact of a social enterprise; and prepare possible scenarios and weigh the potential outcomes of various arrangements to ensure alignment of investor objectives.

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CSS 1: Accounting and Finance.