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eisavi M, ranjbar fallah M, motaghi S, taheri F. The impact of economic convergence between Iran and selected middle eastern countries on health tourism in Iran. jha 2025; 28 (1) :109-119
URL: http://jha.iums.ac.ir/article-1-4588-en.html
URL: http://jha.iums.ac.ir/article-1-4588-en.html
1- Allameh Tabatabai University, Tehran, Iran.
2- Monetary and Banking Research Institute of Central Bank, Tehran, Iran.
3- Allameh Tabatabai University, Tehran, Iran. ,S.motaghi@atu.ac.ir
4- Shahid Beheshti University of Medical Sciences, Tehran, Iran.
2- Monetary and Banking Research Institute of Central Bank, Tehran, Iran.
3- Allameh Tabatabai University, Tehran, Iran. ,
4- Shahid Beheshti University of Medical Sciences, Tehran, Iran.
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Introduction
Today, many countries have moved toward regional convergences to foster economic growth and development. This trend is driven by economic globalization and the growing need for political and economic cooperation among countries.When countries form regional group, both regional and national interests are better served, and nations can more effectively address their weaknesses and deficiencies [1]. However, regionalism is grounded in the principle that it cannot succeed without alignment with global unity. Achieving globalization requires drivers for regional connectivity. Such connecting factors include geographical, political, cultural, social, and economic commonalities. Countries with common bonds benefit from their facilities and engage in joint investment and production, compensating each other's deficiencies in diverse sectors [1].
Regional convergences not only drive macroeconomic growth, but also improve socio-economic indicators at inter-sectoral and supra-sectoral levels. Among sectors, tourism in general and health tourism in particular play a significant role [2].
Across countries, the main motivations for patient travel vary. Cost is the most important indicator of health tourism growth. Sice healthcare cost is high in most developed countries, patients often travel to less developed countries for treatment [3].
Givent to the middle east diverse populations, cultures, histories, and socio-economic backgrounds, countries in the region have different approaches to health management, access to healthcare, and health costs, leading to health inequalities . Some countries in the region have upgraded their healthcare systems, improving population health over the past decades. In contrast, other countries face healthcare challanges [4]. For example, Saudi Arabia's healthcare system provides free public healthcare for citizens and immigrants employed in the public sector. The United Arab Emirates is known worldwide for its quality medical services in ophthalmology, dental care, cancer treatment, and cosmetic surgery, attracting medical tourists from across the middle east and beyond [4]. On the other hand, ongoing wars in Yemen have hindered the provision of basic health services to citizens. In Syria, more than half of the hospitals have been destroyed by civil war, and the healthcare system lacks necessary medicines and medical equipment due to political sanctions. Therefore, many patients who need medical care travel abroad for medical services [4].
Iran is well-known for advanced medical services such as infertility treatments in Yazd, organ transplants especially kidneys, cochlear implants, cornea, and liver, cosmetic surgery particularly rhinoplasty, cardiovascular procedures, eye disease treatment, dental implants and gum surgery in Tehran and other metropolitan cities [5]. Moreover, Iran offers low cost treatments with high quality services comparable to modern services in the world, making this country one of the hubs for health tourism [6].
Given the middle east’s mix of less developed and developing countries which are different in terms of GDP, health indicators, as well as their capacities and coverage of health systems, regionalism can offers an effective ways to benefit from available capacities. Therefore, the present study aims to apply the gravity model to examine the impact of Iran's convergence with selected countries in the region on health tourism.
Methods
This study investigates the impact of convergence between Iran and selected countries on health tourism in Iran. The data includes 11 countries (Jordan, United Arab Emirates, Bahrain, Turkey, Saudi Arabia, Iraq, Oman, Qatar, Kuwait, Lebanon, and Egypt) that maintain significant medical and health relations with Iran. The research employs panel data analysis using EViews 13 software to evaluate the effects of independent variables on the dependent variable over the period from 1995 to 2020.
This research uses the generalized gravity model , analogous to Newton's law of gravity, which states that the force between two objects is directly proportional to their masses and inversely proportional to the square of the distance between them. The model is expressed as follows:
F=(G0(M1.M2 ̸ D2))
Key variables examined in this model included economic size (GDP and exchange rate), population, inter-country distance, health costs, and the presence of a hypothetical middle east :union:.
The gravity model suggests that bilateral trade flows are positively correlated with the economic sizes of two countries and negatively correlated with the distance between them. The simplified form of the gravity model is defined as:
Tij=A0(Yi.Yj ̸ Dij)
In the standard gravity model, trade between two countries is positively influenced by their economic sizes and negatively affected by the geographical distance between them. The model applied in this research is formulated as follows:
Log (Trade)ijt = a0 + a1 Log GDPit + a2 Log GDPjt + a3 Log POPit + a4 Log POPjt + a5 Log Dij + a6 Log Hit + a7 Log Hjt + a8 Log Exrit + a9 Log Exrjt + a10 (AU)ij + Ɛt
Where:
Tradeijt = trade in health services of Iran (i) and selected countries (j) in the time period t, as an index of health tourism
GDPit = economic size of country i in time period t
GDPjt = economic size of country j in time period t
POPit = population size i in time period t
POPjt = population size j in time period t
Dij = distance of country i to country j
Hit = health cost of country i
Hjt = health expenditure of country j
Exrit = exchange rate of country i in time period t
Exrjt = exchange rate of country j in time period t
AUij = hypothetical middle east :union:. By eliminating or reducing tariff and non-tariff barriers, the member countries of an economic agreement are expected to increase trade. It can be predicted that the the :union: has a positive effect on trade exchanges between the two countries. This variable takes a value of one if Iran and other countries are members of the same :union:, and otherwise, its value will be zero.
Results
The results showed that the R2 value (coefficient of determination) is 96%, indicating that the explanatory variables acccount for 96% of the variance in the dependent variable. The gross domestic product of selected countries has a positive and significant relationship with health tourism between Iran and these countries, such that one percent increase in GDP of selected countries leads to a 0.04% rise in health tourism demand. The relationship between Iran's GDP and health tourism in Iran and selected countries is positive and significant, with a one percent increase in Iran's GDP resulting in a 1.5%. increase in the rate of health tourist attraction in Iran and other countries.
The population selected countries also shows a positive and significant relashionship with health tourism, where one percent increase in the population of selected countries (middle-aged and older) raises the number of health tourism applicants by 0.5%. Similarly, Iran's population has a positive and significant effect, as one percent increase in Iran's population leads to a 5.4% increase in health tourism volume with these countries.
The relationship between Iran's real exchange rate and the amount of health tourism with selected countries is not statistically significant. In contrast, the exchange rate of the selected countries has a positive and significant effect, where one percent increase in the exchange rate of other selected countries significantly boosts the demand for health tourism between Iran and these countries.
The physical distance between Iran and selected countries has a negative and significant relashionship with the number of tourism applicants as each increase in the geographical distance reduces the demand for health tourism by 0.3%. In addition, health costs in the selected countries has a positive and significant effect on the demand for health tourism and one percent increase in their health costsraises the demand for health tourism by 0.04%. In contrast, Iran's health cost shows a negative and significant effect on health tourism attraction, where one percent increase in Iran's health costs reduces e health tourism attraction by 0.7%. The coefficient of the hypothetical middle east economic :union: was examined as a dummy variable and the results show that it is negative and statistically insignificant.
Discussion
According to the results, increasing the GDP of selected middle eastern countries can enhance the financial capacity of their population and consequently increase their willingness to travel to Iran for medical and health services, thereby fostering the growth of health tourism in Iran. Conversely, increasing Iran's GDP can lead to increased demand for medical and health services in Iran by strengthening people's financial capacity and improving health and medical infrastructure and attracting foreign investment in the health sector. This factor can also lead to increased quality of medical services and development of new technologies and make Iran an attractive destination for health tourism applicants. Therefore, regarding the GDP, it can be stated that any improvemnt in GDP of Iran and other selected countries has ha a positive and significant effect. High health costs in selected countries can drive people to seek quality medical services at lower costs in Iran. This dituation can help attract health tourists. Conversly, if Iran's medical costs are high, health tourists may seek more affordable options in other countries, which negatively impact on health tourism in Iran.
Another variable affecting health tourism is the exchange rate. Exchange rate fluctuations can significantly impact on tourists’ decision-making. If Iran's exchange rate is lower than selected countries, this can stimulate growth in health tourism. The geographical distance between Iran and selected countries can have a negative impact on health tourism. The greater the distance, the higher travel costs and time, which may deter people from traveling to Iran. If the hypothetical economic :union: fails to effectively promote economic convergence and facilitate travel, its impact on health tourism may be negative and insignificant.
Limitation
Lack of access to accurate and comprehensive data on health tourism including the number of medical tourists, costs and quality of medical services can complicate the analysis.
Conclusion
Iran's convergence with selected middle eastern countries can have positive effects on health tourism. Specifically, economic convergence can help reduce travel barriers and facilitate movement between countries. This situation can lead to an increase in the number of health tourists from neighboring countries to Iran. Moreover, convergence strengthens economic relations, and economic-commercial cooperation can facilitate the exchange of information and experiences in the field of medical and health services, thereby improving service quality. In addition, convergence can attract joint investments in the health sector, leading to the development of infrastructure and new technologies in Iran. Finally, convergence can increase competition in medical services, which in turn helps improve quality and reduce costs. Given Iran’s remarkable potential of health tourism, developing a systematic and comprehensive strategy for this industry is essential. Therefore, Iran's convergence with selected middle eastern countries can positively affect health tourism, provided that economic and geographical factors are properly managed. Improving infrastructure, reducing costs, and facilitating travel can attract more health tourists.
Decleration
Ethical consideration: Not applicable.
Funding: This study did not receive any financial support.
Conflicts of interest: The authors have no conflict of interest.
Authors contributions: M.E: Study design, data analysis, writing-original draft; M.R.: Conceptualization, study design, writing-original draft; S.M: Study design, methodology, validation, writing-review and editing., F.T: Data curation.
Consent for Publication: None.
Data availability: If needed, the data used in this study will be made available through correspondence with the corresponding author.
AI declaration: Artificial intelligence tools (AI) were not used to write the article.
Acknowledgments: The authors thank everyone who collaborated in this research.
Today, many countries have moved toward regional convergences to foster economic growth and development. This trend is driven by economic globalization and the growing need for political and economic cooperation among countries.When countries form regional group, both regional and national interests are better served, and nations can more effectively address their weaknesses and deficiencies [1]. However, regionalism is grounded in the principle that it cannot succeed without alignment with global unity. Achieving globalization requires drivers for regional connectivity. Such connecting factors include geographical, political, cultural, social, and economic commonalities. Countries with common bonds benefit from their facilities and engage in joint investment and production, compensating each other's deficiencies in diverse sectors [1].
Regional convergences not only drive macroeconomic growth, but also improve socio-economic indicators at inter-sectoral and supra-sectoral levels. Among sectors, tourism in general and health tourism in particular play a significant role [2].
Across countries, the main motivations for patient travel vary. Cost is the most important indicator of health tourism growth. Sice healthcare cost is high in most developed countries, patients often travel to less developed countries for treatment [3].
Givent to the middle east diverse populations, cultures, histories, and socio-economic backgrounds, countries in the region have different approaches to health management, access to healthcare, and health costs, leading to health inequalities . Some countries in the region have upgraded their healthcare systems, improving population health over the past decades. In contrast, other countries face healthcare challanges [4]. For example, Saudi Arabia's healthcare system provides free public healthcare for citizens and immigrants employed in the public sector. The United Arab Emirates is known worldwide for its quality medical services in ophthalmology, dental care, cancer treatment, and cosmetic surgery, attracting medical tourists from across the middle east and beyond [4]. On the other hand, ongoing wars in Yemen have hindered the provision of basic health services to citizens. In Syria, more than half of the hospitals have been destroyed by civil war, and the healthcare system lacks necessary medicines and medical equipment due to political sanctions. Therefore, many patients who need medical care travel abroad for medical services [4].
Iran is well-known for advanced medical services such as infertility treatments in Yazd, organ transplants especially kidneys, cochlear implants, cornea, and liver, cosmetic surgery particularly rhinoplasty, cardiovascular procedures, eye disease treatment, dental implants and gum surgery in Tehran and other metropolitan cities [5]. Moreover, Iran offers low cost treatments with high quality services comparable to modern services in the world, making this country one of the hubs for health tourism [6].
Given the middle east’s mix of less developed and developing countries which are different in terms of GDP, health indicators, as well as their capacities and coverage of health systems, regionalism can offers an effective ways to benefit from available capacities. Therefore, the present study aims to apply the gravity model to examine the impact of Iran's convergence with selected countries in the region on health tourism.
Methods
This study investigates the impact of convergence between Iran and selected countries on health tourism in Iran. The data includes 11 countries (Jordan, United Arab Emirates, Bahrain, Turkey, Saudi Arabia, Iraq, Oman, Qatar, Kuwait, Lebanon, and Egypt) that maintain significant medical and health relations with Iran. The research employs panel data analysis using EViews 13 software to evaluate the effects of independent variables on the dependent variable over the period from 1995 to 2020.
This research uses the generalized gravity model , analogous to Newton's law of gravity, which states that the force between two objects is directly proportional to their masses and inversely proportional to the square of the distance between them. The model is expressed as follows:
F=(G0(M1.M2 ̸ D2))
Key variables examined in this model included economic size (GDP and exchange rate), population, inter-country distance, health costs, and the presence of a hypothetical middle east :union:.
The gravity model suggests that bilateral trade flows are positively correlated with the economic sizes of two countries and negatively correlated with the distance between them. The simplified form of the gravity model is defined as:
Tij=A0(Yi.Yj ̸ Dij)
In the standard gravity model, trade between two countries is positively influenced by their economic sizes and negatively affected by the geographical distance between them. The model applied in this research is formulated as follows:
Log (Trade)ijt = a0 + a1 Log GDPit + a2 Log GDPjt + a3 Log POPit + a4 Log POPjt + a5 Log Dij + a6 Log Hit + a7 Log Hjt + a8 Log Exrit + a9 Log Exrjt + a10 (AU)ij + Ɛt
Where:
Tradeijt = trade in health services of Iran (i) and selected countries (j) in the time period t, as an index of health tourism
GDPit = economic size of country i in time period t
GDPjt = economic size of country j in time period t
POPit = population size i in time period t
POPjt = population size j in time period t
Dij = distance of country i to country j
Hit = health cost of country i
Hjt = health expenditure of country j
Exrit = exchange rate of country i in time period t
Exrjt = exchange rate of country j in time period t
AUij = hypothetical middle east :union:. By eliminating or reducing tariff and non-tariff barriers, the member countries of an economic agreement are expected to increase trade. It can be predicted that the the :union: has a positive effect on trade exchanges between the two countries. This variable takes a value of one if Iran and other countries are members of the same :union:, and otherwise, its value will be zero.
Results
The results showed that the R2 value (coefficient of determination) is 96%, indicating that the explanatory variables acccount for 96% of the variance in the dependent variable. The gross domestic product of selected countries has a positive and significant relationship with health tourism between Iran and these countries, such that one percent increase in GDP of selected countries leads to a 0.04% rise in health tourism demand. The relationship between Iran's GDP and health tourism in Iran and selected countries is positive and significant, with a one percent increase in Iran's GDP resulting in a 1.5%. increase in the rate of health tourist attraction in Iran and other countries.
The population selected countries also shows a positive and significant relashionship with health tourism, where one percent increase in the population of selected countries (middle-aged and older) raises the number of health tourism applicants by 0.5%. Similarly, Iran's population has a positive and significant effect, as one percent increase in Iran's population leads to a 5.4% increase in health tourism volume with these countries.
The relationship between Iran's real exchange rate and the amount of health tourism with selected countries is not statistically significant. In contrast, the exchange rate of the selected countries has a positive and significant effect, where one percent increase in the exchange rate of other selected countries significantly boosts the demand for health tourism between Iran and these countries.
The physical distance between Iran and selected countries has a negative and significant relashionship with the number of tourism applicants as each increase in the geographical distance reduces the demand for health tourism by 0.3%. In addition, health costs in the selected countries has a positive and significant effect on the demand for health tourism and one percent increase in their health costsraises the demand for health tourism by 0.04%. In contrast, Iran's health cost shows a negative and significant effect on health tourism attraction, where one percent increase in Iran's health costs reduces e health tourism attraction by 0.7%. The coefficient of the hypothetical middle east economic :union: was examined as a dummy variable and the results show that it is negative and statistically insignificant.
Discussion
According to the results, increasing the GDP of selected middle eastern countries can enhance the financial capacity of their population and consequently increase their willingness to travel to Iran for medical and health services, thereby fostering the growth of health tourism in Iran. Conversely, increasing Iran's GDP can lead to increased demand for medical and health services in Iran by strengthening people's financial capacity and improving health and medical infrastructure and attracting foreign investment in the health sector. This factor can also lead to increased quality of medical services and development of new technologies and make Iran an attractive destination for health tourism applicants. Therefore, regarding the GDP, it can be stated that any improvemnt in GDP of Iran and other selected countries has ha a positive and significant effect. High health costs in selected countries can drive people to seek quality medical services at lower costs in Iran. This dituation can help attract health tourists. Conversly, if Iran's medical costs are high, health tourists may seek more affordable options in other countries, which negatively impact on health tourism in Iran.
Another variable affecting health tourism is the exchange rate. Exchange rate fluctuations can significantly impact on tourists’ decision-making. If Iran's exchange rate is lower than selected countries, this can stimulate growth in health tourism. The geographical distance between Iran and selected countries can have a negative impact on health tourism. The greater the distance, the higher travel costs and time, which may deter people from traveling to Iran. If the hypothetical economic :union: fails to effectively promote economic convergence and facilitate travel, its impact on health tourism may be negative and insignificant.
Limitation
Lack of access to accurate and comprehensive data on health tourism including the number of medical tourists, costs and quality of medical services can complicate the analysis.
Conclusion
Iran's convergence with selected middle eastern countries can have positive effects on health tourism. Specifically, economic convergence can help reduce travel barriers and facilitate movement between countries. This situation can lead to an increase in the number of health tourists from neighboring countries to Iran. Moreover, convergence strengthens economic relations, and economic-commercial cooperation can facilitate the exchange of information and experiences in the field of medical and health services, thereby improving service quality. In addition, convergence can attract joint investments in the health sector, leading to the development of infrastructure and new technologies in Iran. Finally, convergence can increase competition in medical services, which in turn helps improve quality and reduce costs. Given Iran’s remarkable potential of health tourism, developing a systematic and comprehensive strategy for this industry is essential. Therefore, Iran's convergence with selected middle eastern countries can positively affect health tourism, provided that economic and geographical factors are properly managed. Improving infrastructure, reducing costs, and facilitating travel can attract more health tourists.
Decleration
Ethical consideration: Not applicable.
Funding: This study did not receive any financial support.
Conflicts of interest: The authors have no conflict of interest.
Authors contributions: M.E: Study design, data analysis, writing-original draft; M.R.: Conceptualization, study design, writing-original draft; S.M: Study design, methodology, validation, writing-review and editing., F.T: Data curation.
Consent for Publication: None.
Data availability: If needed, the data used in this study will be made available through correspondence with the corresponding author.
AI declaration: Artificial intelligence tools (AI) were not used to write the article.
Acknowledgments: The authors thank everyone who collaborated in this research.
Type of Study: Research |
Subject:
Health Services Management
Received: 2025/02/9 | Accepted: 2025/08/13 | Published: 2025/09/4
Received: 2025/02/9 | Accepted: 2025/08/13 | Published: 2025/09/4
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