Redefining the Nexus of Military Spending Among Southeast Mediterranean Countries in the Presence of Nonlinearities

Panagiotis Palaios and Evangelia Papapetrou

Defence and Peace Economics, 2024, vol. 35, issue 7, 865-882

Abstract: The paper presents evidence on the relationship concerning military spending among Southeast Mediterranean countries (Greece – Turkey, Israel – Egypt, Israel – Turkey) over the period 1962–2020. We account for the presence of nonlinearities in the bilateral relationships of defence spending by applying Threshold Autoregressive methodologies and utilize kink regression analysis to detect the existence of a country’s military spending threshold that signals a threat to another country of the region. Our empirical results show: First, there is a nonlinear strategic interaction between the countries examined, in the sense that their defence spending policy is cointegrated. Second, there is no arms race among the countries examined, but only unilateral effects. Third, there is consistent evidence of a possible military spending equilibrium, in the absence of friction between the countries involved (peace threshold). Our findings have important policy implications as they indicate, first, that each country in the region should not determine its level of military spending considering only operational factors, but also considering the signaling of its military spending on its neighboring countries and, second, that there is space for peaceful solutions regarding disputes in the Southeast Mediterranean region.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/10242694.2023.2241122 (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:35:y:2024:i:7:p:865-882

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

DOI: 10.1080/10242694.2023.2241122

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 ().