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Does defence spending matter to employment in Taiwan?

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  • Jr-Tsung Huang
  • An-Pang Kao

Abstract

This paper investigates an important but neglected issue regarding the economic role of defence spending on employment in Taiwan. The study herein adopts official time series data of yearly defence spending, employment in the private sector, GDP, average monthly salary from 1966 to 2002, and the Autoregressive Distributed Lag (ARDL) approach to the cointegration proposed by Pesaran and Shin (1998) and Pesaran et al. (2001). The main finding of this study is that defence spending is able to benefit the employment situation in the long run, but damages employment in the short run, which is reasonable but different from the finding in Turkey provided by Yildirim and Sezgin (2003). In addition, the change in real GDP has a positive and significant influence on employment in both the short run and long run

Suggested Citation

  • Jr-Tsung Huang & An-Pang Kao, 2005. "Does defence spending matter to employment in Taiwan?," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(2), pages 101-115.
    • Handle: RePEc:taf:defpea:v:16:y:2005:i:2:p:101-115
    DOI: 10.1080/10242690500070094
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    Citations

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    Cited by:

    1. Cosimo Magazzino & Lorenzo Giolli & Marco Mele, 2015. "Wagner's Law and Peacock and Wiseman's Displacement Effect in European Union Countries: A Panel Data Study," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 812-819.
    2. Yemane Wolde-Rufael, 2016. "Defence Spending and Income Inequality in Taiwan," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(6), pages 871-884, November.
    3. Ying Zhang & Xiaoxing Liu & Jiaxin Xu & Rui Wang, 2017. "Does military spending promote social welfare? A comparative analysis of the BRICS and G7 countries," Defence and Peace Economics, Taylor & Francis Journals, vol. 28(6), pages 686-702, November.
    4. Jenn-Hong Tang & Cheng-Chung Lai & Eric Lin, 2009. "Military Expenditure And Unemployment Rates: Granger Causality Tests Using Global Panel Data," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(4), pages 253-267.
    5. Huang, Zhigang & Huang, Le, 2020. "Individual new energy consumption and economic growth in China," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).
    6. Yi-Kai Su & Kae-Yih Tzeng & Chun-Jan Tseng & Cheng-Hsien Lin, 2024. "The Influence of Defense Industry Development Act on the Smooth Transition Dynamics of Stock Volatilities of Defense Industry," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 14(3), pages 1-7.
    7. Cheng-Te Lee, 2022. "Military Spending and Employment," Defence and Peace Economics, Taylor & Francis Journals, vol. 33(4), pages 501-510, May.
    8. Knobel, Alexander (Кнобель, Александр) & Chokaev, Bekhan (Чокаев, Бекхан) & Mironov, Alexey (Миронов, Алексей), 2015. "Comparative Analysis of the Effectiveness of Public Spending in the Field of National Defense and Law Enforcement [Сравнительный Анализ Эффективности Госрасходов В Сфере Национальной Обороны И Прав," Published Papers mn47, Russian Presidential Academy of National Economy and Public Administration.
    9. Huang, Jr-Tsung & Hwang, Yu-Ning & Lo, Kuang-Ta, 2014. "The Role of Foreign Direct Investment in Shanghai's Real Estate Price - Culprit or Scapegoat?," AGI Working Paper Series 2014-02, Asian Growth Research Institute.
    10. Gitana Dudzevičiūtė & Svajone Bekesiene & Ieva Meidute-Kavaliauskiene & Galina Ševčenko-Kozlovska, 2021. "An Assessment of the Relationship between Defence Expenditure and Sustainable Development in the Baltic Countries," Sustainability, MDPI, vol. 13(12), pages 1-27, June.
    11. Ming Zhong & Tsangyao Chang & D. P. Tang & Yemane Wolde-Rufael, 2015. "The causal nexus between military spending and unemployment in the G7: a bootstrap panel causality test," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(6), pages 609-622, December.
    12. Alper Aslan, 2012. "The Relationship Between Military Spending and Black Market Premium in Greece: An ARDL Approach," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 19(2), pages 155-161, November.
    13. Oana Ramona Lobont & Oana Ramona Glont & Leonardo Badea & Sorana Vatavu, 2019. "Correlation of military expenditures and economic growth: lessons for Romania," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(6), pages 2957-2968, November.
    14. Suna Korkmaz, 2015. "The Effect of Military Spending on Economic Growth and Unemployment in Mediterranean Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 5(1), pages 273-280.
    15. Michael Asteris & Jeffery Grainger & David Clark & Shabbar Jaffry, 2007. "Analysing Defence Dependency: The Impact Of The Royal Navy On A Sub-Regional Economy," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(1), pages 53-73.
    16. Kollias Christos & Tzeremes Panayiotis & Paleologou Suzanna-Maria, 2020. "Defence Spending and Unemployment in the USA: Disaggregated Analysis by Gender and Age Groups," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 26(2), pages 1-13, May.

    More about this item

    Keywords

    Defence spending; Employment; Real monthly salary; Taiwan; JEL code: H56; J21; O53;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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