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The impact of military technology transfer on economic growth: international evidence

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  • Yi-Chung Hsu
  • Chien-Chiang Lee

Abstract

The purpose of this article is to measure the impact of military technology transfer on economic growth for 67 selected countries during the period 2000 to 2005 through the application of the Malmquist productivity index, which is broken down into efficiency change and technical change. Our main findings are as follows. First, technology diffusion is all-pervading in half of the sampled countries due to pure efficiency and scale efficiency changes. Second, a higher-income level and an excess of arms imports lead to innovative activities. Third, middle-income countries have higher efficiency and pure efficiency changes; these contribute to higher total productivity change. Finally, after separating the impact of capital investment from that of arms imports, the diffusion of military technology has a more positive and substantial impact on economic growth, thereby revealing the presence of externalities between countries.

Suggested Citation

  • Yi-Chung Hsu & Chien-Chiang Lee, 2012. "The impact of military technology transfer on economic growth: international evidence," Applied Economics, Taylor & Francis Journals, vol. 44(19), pages 2437-2449, July.
  • Handle: RePEc:taf:applec:44:y:2012:i:19:p:2437-2449
    DOI: 10.1080/00036846.2011.564152
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