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Do Military Expenditures Boost Profit Rates?

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  • Elveren, Adem Yavuz
  • Dunning, Rachel

Abstract

Understanding the effect of military expenditures on profit rates can provide important insights on the use of government spending. We utilize the panel dynamic ordinary least square method to examine that relationship for 32 major countries from the period of 1963-2008. We find that while military expenditures increase profit rates in arm-exporting countries, the opposite occurs in the case of arms-importing countries.

Suggested Citation

  • Elveren, Adem Yavuz & Dunning, Rachel, 2017. "Do Military Expenditures Boost Profit Rates?," MPRA Paper 81143, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:81143
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    File URL: https://mpra.ub.uni-muenchen.de/81143/1/MPRA_paper_81143.pdf
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    References listed on IDEAS

    as
    1. Pedroni, Peter, 2004. "Panel Cointegration: Asymptotic And Finite Sample Properties Of Pooled Time Series Tests With An Application To The Ppp Hypothesis," Econometric Theory, Cambridge University Press, vol. 20(03), pages 597-625, June.
    2. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    3. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
    4. Alptekin, Aynur & Levine, Paul, 2012. "Military expenditure and economic growth: A meta-analysis," European Journal of Political Economy, Elsevier, vol. 28(4), pages 636-650.
    5. Pedroni, Peter, 1999. " Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 653-670, Special I.
    6. Dierk Herzer & Sebastian Vollmer, 2012. "Inequality and growth: evidence from panel cointegration," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(4), pages 489-503, December.
    7. Nelson C. Mark & Donggyu Sul, 2003. "Cointegration Vector Estimation by Panel DOLS and Long-run Money Demand," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(5), pages 655-680, December.
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    More about this item

    Keywords

    Military expenditures; profit rates; panel data;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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