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Arms Trade and Economic Growth Nexus in the Post 9/11 Scenario

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  • Zubair, Muhammad
  • Wizarat, Shahida

Abstract

In this paper we have explored the nexus of arms trade with economic growth using a balance panel of 26 high income and upper middle income countries as the whole sample and 19 high income countries and 7 middle income countries as sub samples. Using fixed effect and random effect models after applying the appropriate diagnostic tests, our results give interesting insights. For the whole sample 26 high and upper middle income countries our results show that arms trade has a positive impact on economic growth. But for the sub samples we find that for high income countries the impact of arms trade on growth is positive, while there is no effect on upper middle income countries.

Suggested Citation

  • Zubair, Muhammad & Wizarat, Shahida, 2018. "Arms Trade and Economic Growth Nexus in the Post 9/11 Scenario," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 8(2), pages 115-125.
  • Handle: RePEc:gok:ijdcv1:v:8:y:2018:i:2:p:115-125
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    References listed on IDEAS

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    1. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    2. Elkanj, Nasser & Gangopadhyay, Partha, 2014. "Why is the Middle East burning? An historical analysis of the economic causes of conflicts from 1963 to 1999," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 4(1), pages 35-48.
    3. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    4. Benoit, Emile, 1978. "Growth and Defense in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 26(2), pages 271-280, January.
    5. Ron Smith & Anthony Humm & Jacques Fontanel, 1985. "The Economics of Exporting Arms," Journal of Peace Research, Peace Research Institute Oslo, vol. 22(3), pages 239-247, September.
    6. Pavel Yakovlev, 2007. "Arms Trade, Military Spending, And Economic Growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(4), pages 317-338.
    7. Badi H. Baltagi & Chihwa Kao, 2000. "Nonstationary Panels, Cointegration in Panels and Dynamic Panels: A Survey," Center for Policy Research Working Papers 16, Center for Policy Research, Maxwell School, Syracuse University.
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    More about this item

    Keywords

    Economic Growth; Defense; Arms trade; Net exports; fixed effect; Random effect;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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