Panel Cointegration Analysis of Military Expenditure and Economic Growth in the Selected Balkan Countries

Kalaš Branimir (), Mirović Vera () and Milenković Nada ()
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Kalaš Branimir: University of Novi Sad, Faculty of Economics in Subotica, Serbia
Mirović Vera: University of Novi Sad, Faculty of Economics in Subotica, Serbia
Milenković Nada: University of Novi Sad, Faculty of Economics in Subotica, Serbia

Economic Themes, 2021, vol. 59, issue 3, 375-390

Abstract: The issue of security and safety i s a fundamental condition for stable economic trends. Military expenditure can be a very powerful tool for a rapid economic growth. The paper examines the long-run relationship between military expenditure and economic growth in the selected Balkan countries, such as Albania, Bosnia and Herzegovina, Croatia, Montenegro, North Macedonia, Serbia and Slovenia for the period 2004-2018. The analysis implies a panel unit root test, a panel cointegration test, as well as a panel Granger causality test. The results have identified a long-run relationship between military expenditure and economic growth in the Balkan countries based on panel data analysis. Also, empirical findings have confirmed that shock experience in one of the countries’ military expenditure and economic growth have effect on other countries. Finally, the results have determined unidirectional causality from military expenditure to economic growth in these countries and not vice versa.

Keywords: military expenditure; economic growth; Balkan countries; panel cointegration analysis (search for similar items in EconPapers)
JEL-codes: C23 C51 H2 O11 O23 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecothe:v:59:y:2021:i:3:p:375-390:n:6

DOI: 10.2478/ethemes-2021-0021

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