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Military Spending and Economic Growth Nexus in Sixteen Latin and South American Countries: A Bootstrap Panel Causality Test

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  • Hsien-Hung Kung

    ()
    (Department of Marketing and Distribution Management, Hsing Wu University, Taipei, Taiwan)

  • Jennifer C. H. Min

    ()
    (Department of International Business, Ming Chuan University, No. 250, Sec. 5, Zhongshan N. Rd., Taipei 11103, Taiwan.)

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    Abstract

    This study revisits the causal linkages between military spending and economic growth in sixteen Latin and South American countries (i.e., Argentina, Belize, Bolivia, Brazil, Chile, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Mexico, Nicaragua, Paraguay, Peru, Uruguay, and Venezuela) by focusing countryspecific analysis for the period 1988-2010. The panel causality analysis that accounts for dependency and heterogeneity across countries supports evidence on the direction of causality is consistent with the neutrality hypothesis for twelve countries and a military spending-growth hypothesis for Belize and Nicaragua. Regarding the direction of growth-military spending nexus, we find one-way Granger causality running from economic growth to military spending for Bolivia and Ecuador.

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    Bibliographic Info

    Article provided by Institute for Economic Forecasting in its journal Romanian Journal for Economic Forecasting.

    Volume (Year): (2013)
    Issue (Month): 4 (December)
    Pages: 171-185

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    Handle: RePEc:rjr:romjef:v::y:2013:i:4:p:171-185

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    Related research

    Keywords: military expenditure; economic growth; dependency and heterogeneity; panel causality test; Latin and South American countries.;

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