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Military Expenditure And Economic Growth In Middle Eastern Countries: A Dynamic Panel Data Analysis

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Author Info

  • Julide Yildirim
  • Selami Sezgin
  • Nadir Ocal

Abstract

Defence expenditures have both costs and benefits to the economy. The costs of defence expenditures are mainly emphasized as opportunity costs. On the other hand, defence spending may have growth-promoting potential benefits: a rise in defence spending may result in a higher aggregate demand, production and employment. This paper examines empirically the effects of military expenditures on economic growth for Middle Eastern countries and Turkey, for the time-period 1989-1999. The relationship between military expenditure and economic growth is investigated by using cross-section and dynamic panel estimation techniques. Empirical analysis indicates that military expenditure enhances economic growth in the Middle Eastern countries and Turkey as a whole.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Defence and Peace Economics.

Volume (Year): 16 (2005)
Issue (Month): 4 ()
Pages: 283-295

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Handle: RePEc:taf:defpea:v:16:y:2005:i:4:p:283-295

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Related research

Keywords: Military expenditure; Economic growth; Defence economics; Dynamic panel data analysis;

References

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  1. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
  2. Dakurah, A. Henry & Davies, Stephen P. & Sampath, Rajan K., 2001. "Defense spending and economic growth in developing countries: A causality analysis," Journal of Policy Modeling, Elsevier, vol. 23(6), pages 651-658, August.
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  4. Selami Sezgin, 1997. "Country survey X: Defence spending in Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 8(4), pages 381-409.
  5. Ruth A. Judson & Ann L. Owen, 1997. "Estimating dynamic panel data models: a practical guide for macroeconomists," Finance and Economics Discussion Series 1997-3, Board of Governors of the Federal Reserve System (U.S.).
  6. Abu-Bader, Suleiman & Abu-Qarn, Aamer S., 2003. "Government expenditures, military spending and economic growth: causality evidence from Egypt, Israel, and Syria," Journal of Policy Modeling, Elsevier, vol. 25(6-7), pages 567-583, September.
  7. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287, April.
  8. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  9. Paul Dunne & Dimitrios Vougas, 1999. "Military Spending and Economic Growth in South Africa," Journal of Conflict Resolution, Peace Science Society (International), vol. 43(4), pages 521-537, August.
  10. Biswas, Basudeb & Ram, Rati, 1986. "Military Expenditures and Economic Growth in Less Developed Countries: An Augmented Model and Further Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 34(2), pages 361-72, January.
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Citations

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Cited by:
  1. Aamer Abu-Qarn, 2010. "The Defense-Growth Nexus: An Application for the Israeli-Arab Conflict," Working Papers 1003, Ben-Gurion University of the Negev, Department of Economics.
  2. Lin, Eric S. & Ali, Hamid E., 2009. "Military Spending and Inequality: Panel Granger Causality Test," MPRA Paper 40159, University Library of Munich, Germany.
  3. Aamer S. Abu-Qarn & Suleiman Abu-Bader, 2007. "Structural Breaks In Military Expenditures: Evidence For Egypt, Israel,Jordan And Syria," Working Papers 0704, Ben-Gurion University of the Negev, Department of Economics.
  4. Muhammad Shahbaz & Talat Afza & Muhammad Shahbaz Shabbir, 2013. "Does Defence Spending Impede Economic Growth? Cointegration And Causality Analysis For Pakistan," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(2), pages 105-120, April.
  5. Tiwari, Aviral & Shahbaz, Muhammad, 2011. "Does Defence Spending Stimulate Economic Growth in India?," MPRA Paper 30880, University Library of Munich, Germany, revised 18 Apr 2011.
  6. Huang, Bwo-Nung & Hwang, M.J. & Yang, C.W., 2008. "Causal relationship between energy consumption and GDP growth revisited: A dynamic panel data approach," Ecological Economics, Elsevier, vol. 67(1), pages 41-54, August.
  7. Chen, Pei-Fen & Lee, Chien-Chiang & Chiu, Yi-Bin, 2014. "The nexus between defense expenditure and economic growth: New global evidence," Economic Modelling, Elsevier, vol. 36(C), pages 474-483.
  8. Farzanegan, Mohammad Reza, 2011. "Military spending and economic growth: the case of Iran," MPRA Paper 35498, University Library of Munich, Germany.
  9. Giorgio d'Agostino & Luca Pieroni & J Paul Dunne, 2010. "Assessing the Effects of Military Expenditure on Growth," Working Papers 1012, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  10. Shahbaz Muhammad & Carlos Leitao Nuno & Salah Uddin Ghazi & Mohamed Arouri & Frederic Teulon, 2014. "Should Portuguese Economy Invest in Defense Spending? A Revisit," Working Papers 2014-380, Department of Research, Ipag Business School.
  11. Khalid ZAMAN & Qazi Shujaat MAHMOOD & Muhammad Mushtaq KHAN & Awais RASHID & Mehboob AHMAD, 2012. "An Empirical Investigation of External Debt - Military Expenditure Nexus in Bangladesh," Economia. Seria Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 15(1), pages 173-188, June.
  12. Kumudini R. Ganegodage & Alicia N. Rambaldi, 2012. "Economic Consequences of War: Evidence from Sri Lanka," Discussion Papers Series 453, School of Economics, University of Queensland, Australia.
  13. Hirnissa, M.T & Habibullah, M.S. & Baharom, A.H., 2008. "Defense and Inequality: Evidence from Selected ASIAN Countries," MPRA Paper 11916, University Library of Munich, Germany.

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