Is the arms race between the PRC and Taiwan simply a myth? The long-run and causal relationship between their defence spending ratios

Shyh-Wei Chen

Applied Economics Letters, 2010, vol. 17, issue 2, 159-164

Abstract: This article investigates the long-run and causal relationship between the defence spending-GDP ratios of the People's Republic of China and Taiwan. The results clearly indicate that there is a long-run level equilibrium relationship between the ratio of defence spending of mainland China and that of Taiwan. The estimated long-run relationship shows that this level relationship is negative, indicative of a convergence phenomenon for the defence spending ratios of the two rivals. Moreover, causality test results substantiate that there is neutrality between the defence spending ratios of the PRC and of Taiwan in the short run but long-run causality running from Taiwan to the PRC. Based on the causality results, it is concluded that there is no arms race between the PRC and Taiwan.

Date: 2010
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13504850701719884 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:17:y:2010:i:2:p:159-164

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504850701719884

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().