Military Expenditure and Economic Growth in Brics and Mist Countries: Evidence from Bootstrap Panel Granger Causality Analysis

Mehmet Destek and İlyas Okumus

South-Eastern Europe Journal of Economics, 2016, vol. 14, issue 2, 175-186

Abstract: This paper investigates the causal relationship between military expenditure, economic growth, and real capital stock in BRICS (Brazil, Russia, India, China, and South Africa) and MIST (Mexico, Indonesia, South Korea, and Turkey) countries. For this purpose, the period from 1990 to 2013 is examined using with the bootstrap panel Granger causality method. Results show that there is cross-sectional ­dependency and country-specific heterogeneity across BRICS and MIST countries. It is also concluded that a positive unidirectional causality from military expenditure to economic growth exists in China. By contrast, there is negative unidirectional causality from military expenditures to economic growth in Turkey. In addition, the feedback hypothesis is confirmed for Russia and the neutrality hypothesis is supported by the data from Brazil, India, Indonesia, South Korea, Mexico and South Africa.

Keywords: Military expenditure; Economic Growth; Cross-Sectional Dependency; BRICS and MIST Countries (search for similar items in EconPapers)
JEL-codes: C33 H56 O11 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:seb:journl:v:14:y:2016:i:2:p:175-186

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