Unobserved common factors in military expenditure interactions across MENA countries
AbstractIn this paper we explore the patterns of interactions between military expenditure shares in the MENA region over the period 1979-2007. We explore if there are latent common factors that impact on the military expenditures of 15 countries in the MENA region and whether these factors can be interpreted. Unobserved common factors induce cross-sectional dependence and may lead traditional panel-time series estimators to be inconsistent. To identify these latent factors we apply the Principal Component Analysis. We evaluate the interpretation of the estimated factors using the Multiple-Indicator Multiple-Cause model. We found that there is a substantial evidence of cross-sectional dependence in the MENA region, induced mainly by two unobserved factors, but these factors are difficult to interpret.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Birkbeck, Department of Economics, Mathematics & Statistics in its series Birkbeck Working Papers in Economics and Finance with number 1001.
Date of creation: Jan 2010
Date of revision:
Contact details of provider:
Postal: Malet Street, London WC1E 7HX, UK
Phone: 44-20- 76316429
Fax: 44-20- 76316416
Web page: http://www.ems.bbk.ac.uk/
Other versions of this item:
- Elisa Cavatorta, 2010. "Unobserved Common Factors In Military Expenditure Interactions Across Mena Countries," Defence and Peace Economics, Taylor and Francis Journals, vol. 21(4), pages 301-316.
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.