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Military Expenditure and Economic Growth in Brics and Mist Countries: Evidence from Bootstrap Panel Granger Causality Analysis

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Listed:
  • Mehmet Akif Destek

    (Gaziantep University, Turkey)

  • Ilyas Okumus

    (Gaziantep University, Turkey)

Abstract

This paper investigates the causal relationship between military expenditure, economic growth, and real capital stock in BRICS (Brazil, Russia, India, China, and South Africa) and MIST (Mexico, Indonesia, South Korea, and Turkey) countries. For this purpose, the period from 1990 to 2013 is examined using with the bootstrap panel Granger causality method. Results show that there is cross-sectional ­dependency and country-specific heterogeneity across BRICS and MIST countries. It is also concluded that a positive unidirectional causality from military expenditure to economic growth exists in China. By contrast, there is negative unidirectional causality from military expenditures to economic growth in Turkey. In addition, the feedback hypothesis is confirmed for Russia and the neutrality hypothesis is supported by the data from Brazil, India, Indonesia, South Korea, Mexico and South Africa.

Suggested Citation

  • Mehmet Akif Destek & Ilyas Okumus, 2016. "Military Expenditure and Economic Growth in Brics and Mist Countries: Evidence from Bootstrap Panel Granger Causality Analysis," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 14(2), pages 175-186.
    • Handle: RePEc:seb:journl:v:14:y:2016:i:2:p:175-186
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    More about this item

    Keywords

    Military expenditure; Economic Growth; Cross-Sectional Dependency; BRICS and MIST Countries;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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