Military expenditure and economic growth across different groups: A dynamic panel Granger-causality approach

Hsin-Chen Chang, Bwo-Nung Huang and Chin Wei Yang

Economic Modelling, 2011, vol. 28, issue 6, 2416-2423

Abstract: Applying GMM (Arellano and Bond, 1991) to panel data of 90 countries spanning over 1992–2006, this paper explores possible relationships between military expenditure and economic growth. Based on the definitions of income levels by the World Bank – high, middle and low – our results indicate military spending leads negatively economic growth for the panels of low income countries with a marginally significance level of 10%. Of four different regional panels (Africa, Europe, the Middle East–South Asia and Pacific Rim), a negative but stronger (5% significance level) causal relationship from military expenditure to economic growth is found for the Europe and Middle East–South Asia regions.

Keywords: Military expenditure; Economic growth; Dynamic panel data; GMM (search for similar items in EconPapers)
JEL-codes: C22 H56 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (59)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:28:y:2011:i:6:p:2416-2423

DOI: 10.1016/j.econmod.2011.06.001

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