Distinct Asymmetric Effects of Military Spending on Economic Growth for Different Income Groups of Countries

Duygu Yolcu Karadam, Nadir Öcal and Jülide Yildirim

Defence and Peace Economics, 2023, vol. 34, issue 4, 477-494

Abstract: Although possible asymmetries for univariate and multivariate dynamics have been the focus of interest in many areas of economic explorations, it seems that most of the research on military expenditure - economic growth nexus has tended to assume linear relationships. This paper aims to examine possible nonlinearities in military expenditure-economic growth nexus employing data for a sample of 103 countries covering the 1988-2019 period. For this purpose, Panel Smooth Transition Regression, PSTR, models are estimated not only for all countries’ sample but also for low income, middle income, and high-income countries’ subsamples to reveal possible distinct asymmetric relationships for country groups with different income levels. Empirical results for the whole sample, low income and middle income groups indicate that military expenditure not only governs the regime change, but also low and high levels of military expenditure have distinctive and rising negative effects on economic growth with dissimilar threshold effects. Moreover, empirical findings also indicate that net arms exports govern regime change for high income countries, and as net arms exports rise, the negative impacts of military expenditure on economic growth become deeper.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/10242694.2021.1984030 (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:defpea:v:34:y:2023:i:4:p:477-494

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GDPE20

DOI: 10.1080/10242694.2021.1984030

Access Statistics for this article

Defence and Peace Economics is currently edited by Professor Keith Hartley

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