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Military and Economic Growth in ASEAN-5 Countries

Author

Listed:
  • Hirnissa, M.T
  • Habibullah, M.S.
  • Baharom, A.H.

Abstract

In this study we employ the bounds testing procedure suggested by Pesaran (2001) and dynamic OLS (DOLS) proposed by Stock and Watson (1993) to test the robustness of the causal effect and long-run relationships between military expenditure and economic growth in ASEAN-5 countries from the year 1965 to 2006. Generally, our results suggest that: (1) there are only three (Indonesia, Thailand, Singapore) out of five countries analyzed exhibit long–run relationship between military expenditure and economic growth; (2) While for the case of Singapore, the causality is bidirectional, for Indonesia and Thailand it is unidirectional from military expenditure to economic growth; and (3) For the remaining countries, (Malaysia and Philippines), no meaningful relationship could be detected. The results are robust, producing similar results employing both ARDL and DOLS.

Suggested Citation

  • Hirnissa, M.T & Habibullah, M.S. & Baharom, A.H., 2008. "Military and Economic Growth in ASEAN-5 Countries," MPRA Paper 13108, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:13108
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    File URL: https://mpra.ub.uni-muenchen.de/13108/1/MPRA_paper_13108.pdf
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    References listed on IDEAS

    as
    1. 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 361-372, January.
    2. 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.
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    5. Deger, Saadet, 1986. "Economic Development and Defense Expenditure," Economic Development and Cultural Change, University of Chicago Press, vol. 35(1), pages 179-196, October.
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    More about this item

    Keywords

    military expenditure; economic growth; Asean-5;

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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