Nexus between defence spending, economic growth and development: evidence from a disaggregated panel data analysis

Saba, Charles Shaaba; Ngepah, Nicholas

doi:10.1007/s10644-020-09311-7

Cited by 18 publications

(6 citation statements)

References 83 publications

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“…This suggests that historical data on LnPCGDP is essential in predicting MILEX, and it also indicates that economic growth and MILEX are not mutually reinforcing during the growth process. This contradicts the findings of Saba and Ngepah (2022) who found a feedback causal relationship between defense spending, economic growth and development. A study for a panel of countries in the Middle East conducted by Pan et al (2015) found no causal relationship between defense spending and Saudi Arabia's economic growth, which contradicts this paper's findings.…”

Section: Jes 514contrasting

confidence: 93%

“…Furthermore, the correlation coefficients suggest a strong dependency between the cross-sections, demonstrating that shocks in one arms-importing economy may spread to other nations. Traditional unit root tests are unsuccessful in cross-sectional dependence due to decreased power (Pesaran, 2007; Saba and Ngepah, 2022). The second generation unit root test CIPS establishes the order of the variables' integration.…”

Section: Resultsmentioning

confidence: 99%

“…ECTi,t−1 is the error correction term, which represents the speed of adjustment from a short-run deviation to a long-run equilibrium. We then use the Dumitrescu and Hurlin (2012) panel Granger causality test, similar to that in Saba and Ngepah (2022). It shows how much the two research variables support and reinforce one another as they expand.…”

Section: Methodsmentioning

confidence: 99%

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The nexus between arms imports, military expenditures and economic growth of the top arms importers in the world: a pooled mean group approach

Chary

2023

JES

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PurposeThis paper explores whether data back the claim that imports of armaments are inherently bad for economic growth. Regardless of one's point of view, the production and trade of weaponry is a significant industry with serious economic implications that warrant investigation. The financial repercussions of military spending have been extensively studied, but the economic effects of arms importation remain unknown.Design/methodology/approachThis study adopts a pooled mean group approach to investigate the nexus between arms imports, military expenditure and per capita GDP for a balanced panel of twenty-five of the top arms importers in the world from 2000 to 2021.FindingsThe authors find that arms imports and military spending negatively impact GDP per capita in the short run, but military spending is beneficial over the long run. The authors also used the Dumitrescu Hurlin Granger causality test, which revealed a unidirectional causation between per capita GDP and military expenditure, and a unidirectional causal relationship from military spending to arms imports.Research limitations/implicationsThis paper is deficient in a few aspects: first, it looks at only those countries comprising the top 70% of arms imports. Second, it omits many political, technological and legal factors that impact arms imports and military expenditures.Originality/valueThis paper looks into the impact of defense spending and arms imports on economic growth for twenty-five nations with the highest share of arms imports in recent times. It is a significant addition to the literature as it resolves the debate of whether or not the military expenditure is wasteful and whether arms imports significantly harm the nation's economic growth.

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Section: Jes 514contrasting

confidence: 93%

Section: Resultsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

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The nexus between arms imports, military expenditures and economic growth of the top arms importers in the world: a pooled mean group approach

Chary

2023

JES

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“…The FMOLS and DOLS solve the issue of endogeneity, multicollinearity, and autocorrelation (Liu et al, 2021). We then use the Dumitrescu and Hurlin (2012) panel Granger causality test, similar to Saba and Ngepah (2022). It shows how much the two research variables support and reinforce one another as they expand.…”

Section: ∆𝐿𝑛(𝑇𝑜𝑡𝐸𝑥𝑝|𝐷𝑒𝑣𝐸𝑥𝑝|𝑁𝐷𝑒𝑣𝐸𝑥𝑝) 𝑖𝑡 = 𝛽mentioning

confidence: 99%

An Empirical Investigation of Wagner's Law for Twelve Indian States: A Pooled Mean Group Approach Using Linear and Non-Linear Specifications

Choudhary,

Chary,

Singh

2023

Preprint

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Wagner's Law, which is considered the first model of public spending in public finance history, suggests that there is a tendency for government spending to increase relative to national income over the long run. This study aims to empirically test the validity of Wagner's hypothesis for twelve Indian states grouped into high-debt and low-debt states, from 2002 to 2020 using a pooled mean group approach. The study also examines the short-run causality between government expenditure and per capita GDP using the Dumitrescu Hurlin Granger causality test. We found a long run relationship between state expenditure and per capita gross state domestic product. Furthermore, there appears to be a significant asymmetric effect of per capita GDP on the expenditure variables, for the entire sample. The study offers value to policy-makers in understanding expenditure dynamics of Indian states and the validity of Wagner’s law in low and high debt states.

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“…However, he also reminded us that there is a presumption of the limitlessness of natural resources and that not enough attention is paid to the changes that are caused to the planet by development. However, the HDI is an inclusive metric of the basic life factors seen as an explanatory indicator of the ED [50,51].…”

Section: Human Development Index (Hdi)mentioning

confidence: 99%

The Key to Sustainable Economic Development: A Triple Bottom Line Approach

2022

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Concerns about improving social, environmental, and economic living standards are the basis of the triple bottom line (TBL) link to economic development (ED). Aware of the importance of studying their relationship, this article analysed the influence of TBL on ED. A quantitative methodology was used. The sample comprised a panel of data from 2006 to 2019 for OECD (Organisation for Economic Co-operation and Development) countries. Five multiple linear regression models were estimated by the generalised method of moments. The results of this study revealed that the social dimension of TBL boosts ED, the environmental dimension of TBL slows down ED, and the economic dimension of TBL contains conflicting synergies in ED. The Human Development Index (HDI) should now include indicators of environmental wellbeing. Governments should adopt policies to improve social wellbeing to boost ED, work to coordinate the objectives of environmental protection and ED, and combat vulnerabilities arising from public debt. As one of the first studies to assess the influence of TBL on ED at the country level, the present findings contribute to the reflection about the influence of TBL on a country’s ED and strengthens the discussion around the influence of different dimensions of TBL.

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Nexus between defence spending, economic growth and development: evidence from a disaggregated panel data analysis

Cited by 18 publications

References 83 publications

The nexus between arms imports, military expenditures and economic growth of the top arms importers in the world: a pooled mean group approach

The nexus between arms imports, military expenditures and economic growth of the top arms importers in the world: a pooled mean group approach

An Empirical Investigation of Wagner's Law for Twelve Indian States: A Pooled Mean Group Approach Using Linear and Non-Linear Specifications

The Key to Sustainable Economic Development: A Triple Bottom Line Approach

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