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The Impact of Military Spending on Economic Growth: The Case of North Cyprus

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  • Mete Feridun
  • Bansi Sawhney
  • Muhammad Shahbaz

Abstract

The present study aims at investigating the causal relationship between defence expenditures and economic growth in the case of North Cyprus using the Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration and Granger causality tests for the period from 1977 to 2007. The results suggest that the variables in question are in a long-run equilibrium relationship and that there exists a strong, positive unidirectional causality running from defence expenditures to economic growth.

Suggested Citation

  • Mete Feridun & Bansi Sawhney & Muhammad Shahbaz, 2011. "The Impact of Military Spending on Economic Growth: The Case of North Cyprus," Defence and Peace Economics, Taylor & Francis Journals, vol. 22(5), pages 555-562, January.
    • Handle: RePEc:taf:defpea:v:22:y:2011:i:5:p:555-562
    DOI: 10.1080/10242694.2011.562370
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    References listed on IDEAS

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    1. Peter Batchelor & Paul Dunne & Guy Lamb, 2002. "The Demand for Military Spending in South Africa," Journal of Peace Research, Peace Research Institute Oslo, vol. 39(3), pages 339-354, May.
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    Cited by:

    1. Mehmet Akif Destek & Ilyas Okumus, 2016. "Military Expenditure and Economic Growth in Brics and Mist Countries: Evidence from Bootstrap Panel Granger Causality Analysis," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 14(2), pages 175-186.
    2. Wang, Tung-Pao & Shyu, Stacy Huey-Pyng & Chou, Han-Chung, 2012. "The impact of defense expenditure on economic productivity in OECD countries," Economic Modelling, Elsevier, vol. 29(6), pages 2104-2114.
    3. Serif Canbay & Mustafa Kırca & Erkan Oflaz, 2021. "Relationships Between Defence Expenditures and Economic Growth in G7 Countries Panel Bootstrap Causality Analysis," Bingol University Journal of Economics and Administrative Sciences, Bingol University, Faculty of Economics and Administrative Sciences, vol. 5(1), pages 119-140, August.
    4. Charles Shaaba Saba & Nicholas Ngepah, 2022. "Nexus between defence spending, economic growth and development: evidence from a disaggregated panel data analysis," Economic Change and Restructuring, Springer, vol. 55(1), pages 109-151, February.
    5. 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.
    6. Charles Shaaba Saba & Nicholas Ngepah, 2020. "Empirical Analysis of Military Expenditure and Industrialisation Nexus: A Regional Approach for Africa," International Economic Journal, Taylor & Francis Journals, vol. 34(1), pages 58-84, January.
    7. Charles Shaaba Saba & Nicholas Ngepah, 2021. "Nexus between telecommunication infrastructures, defence and economic growth: a global evidence," Netnomics, Springer, vol. 22(2), pages 139-177, December.
    8. José R. García & Joaquín Murillo & Jordi Suriñach & Esther Vayá, 2018. "Economic impact of the ministry of defence’s budget: methodological design and results for the Spanish economy," Defence and Peace Economics, Taylor & Francis Journals, vol. 29(4), pages 459-473, June.
    9. Gitana Dudzevičiūtė & Vida Česnuitytė & Dalia Prakapienė, 2021. "Defence Expenditure–Government Debt Nexus in the Context of Sustainability in Selected Small European Union Countries," Sustainability, MDPI, vol. 13(12), pages 1-18, June.
    10. Jakub Odehnal & Jiří Neubauer & Aleš Olejníček & Jana Boulaouad & Lenka Brizgalová, 2021. "Empirical Analysis of Military Expenditures in NATO Nations," Economies, MDPI, vol. 9(3), pages 1-15, July.
    11. BĂTUȘARU Cristina Maria & SBÂRCEA Ioana Raluca, 2023. "Security In The Context Of Sustainability: The Implications On Defence Expenditures," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 18(2), pages 48-66, August.
    12. Mert Topcu & Ilhan Aras, 2015. "Defense spending and economic growth: Extended empirical analysis for the European Union," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(2), pages 233-246, April.
    13. Saba Charles Shaaba, 2022. "Defence Spending and Economic Growth in South Africa: Evidence from Cointegration and Co-Feature Analysis," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 28(1), pages 51-100, February.
    14. Ahad, Muhammad & Dar, Adeel Ahmad, 2017. "Modeling the Asymmetric Impact of Defense Spending on Economic Growth: An Evidence from Nonlinear ARDL and Multipliers," MPRA Paper 80085, University Library of Munich, Germany, revised 2017.
    15. Ulrich KEMBENG, 2022. "Military Expenditure and Economic Growth in Chad: An Application of The ARDL Method," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(9), pages 471-475, September.
    16. Mohamed, Hassen & Alimi, Mohsen & Ben Youssef, Slim, 2021. "The role of renewable energy in reducing terrorism: Evidence from Pakistan," Renewable Energy, Elsevier, vol. 175(C), pages 1088-1100.
    17. Serkan K n & Serta Hopo lu & G rkan Bozma, 2016. "Conflict, Defense Spending and Economic Growth in the Middle East: A Panel Data Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 6(1), pages 80-86.
    18. Tariq Hussain & Ahmad Raza Ul Mustafa & Makhdum M.I. & Kaleem Ullah, 2022. "Defense Expenditures, Fiscal Deficit And Debt Servicing Nexus: A Case Study Of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(2), pages 74-83, June.
    19. Charles Shaaba Saba & Nicholas Ngepah, 2022. "Nexus between telecommunication infrastructures, defence and economic growth: a global evidence," Netnomics, Springer, vol. 22(2), pages 139-177, October.
    20. Mohammad Reza Farzanegan, 2014. "Military Spending and Economic Growth: The Case of Iran," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(3), pages 247-269, June.

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