The Asymmetric Relationship Between Military Expenditure, Economic Growth and Industrial Productivity: An Empirical Analysis of India, China and Pakistan Via the NARDL Approach

Syed, Aamir Aijaz

doi:10.14718/revfinanzpolitecon.v13.n1.2021.4

Cited by 12 publications

(12 citation statements)

References 34 publications

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“…On the other hand, the "Benoit Hypothesis," which suggests that military expenditures positively affect economic growth, was confirmed for the panel. Our panel results are consistent with the findings of Macnair et al (1995), Asseery (1996), Brumm, 1997, Sezgin (1997, Murdoch et al (1997), Lai et al (2002), Yıldırım et al (2005, Malizard (2010), Alptekin andLevine (2012), Ismail (2017), Dimitraki and Win (2021) and Aijaz Syed (2021).…”

Section: Conclusion and Policy Recommendationssupporting

confidence: 92%

“…There are no definite results in the studies that followed. While some studies (Macnair et al, 1995;Asseery, 1996;Brumm, 1997;Sezgin, 1997;Murdoch et al, 1997;Lai et al, 2002;Yildirim et al, 2005;Malizard, 2010;Alptekin and Levine, 2012;Canbay and Mercan, 2017;Ismail, 2017;Dimitraki and Win, 2021;Aijaz Syed, 2021) are for the Benoit hypothesis, the others (Faini et al, 1984;Deger, 1986;Dunne and Vougas, 1999;Dunne et al, 2002;Klein, 2004;Yang et al, 2011;D'Agostino et al, 2019;Dunne and Tian, 2015;Luqman and Antonakakis, 2021) are against the hypothesis. Besides, some other studies (Biswas and Ram, 1986;Alexander, 1990;Dakurah et al, 2001;Aye et al, 2014;Gokmenoglu et al, 2015;Manamperi, 2016) did not find sufficient evidence regarding the relationship between economic growth and military expenditures.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

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The effects of military expenditures on labor productivity, innovation and economic growth for the most militarized countries: panel data analysis

İnal

Gürdal

Değirmenci

et al. 2022

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PurposeThere is extensive literature on the effect of military expenditure on economic growth. However, there is also a wide gap in the literature on the relationship between productivity and innovation, which is considered the driving force of economic growth and military expenditures. To this end, this study examines the effect of military expenditures on economic growth, innovation and labor productivity for the period 1995–2019 in most militarized countries.Design/methodology/approachThe tests used in the study's empirical analysis are techniques that take into account cross-sectional dependence and heterogeneity. The stationarity of the variables was tested with the Pesaran’s (2007) unit root test. Then, empirical findings were revealed based on the analysis through Westerlund’s (2008) cointegration test and Emirmahmutoglu and Kose’s (2011) panel causality test.FindingsAccording to the empirical results, there is a long-run relationship, in other words, a cointegration between military expenditures and productivity, innovation and economic growth. Additionally, there are causality relationships between military expenditures and productivity, innovation and economic growth.Practical implicationsThese results support the arguments of military Keynesianism and the Benoit hypothesis.Originality/valueDespite the widespread theoretical debate, no empirical study tests the effect of military expenditure on productivity and innovation to the author's best knowledge. Hence, this study aims to fill this gap in the literature. Moreover, the fact that the econometric method used is based on second generation tests and the timeliness of the period range makes the study's findings more significant.

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Section: Conclusion and Policy Recommendationssupporting

confidence: 92%

Section: Theoretical Backgroundmentioning

confidence: 99%

The effects of military expenditures on labor productivity, innovation and economic growth for the most militarized countries: panel data analysis

İnal

Gürdal

Değirmenci

et al. 2022

View full text Add to dashboard Cite

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“…The insignificance of terrorism and military spending is explained by the failed efforts of the government at combating terrorism despite increasing defence spending, holding rehabilitation programs for prisoners and intensively campaigning against terrorism. Syed (2020) used the nonlinear variant of the ARDL framework (NARDL), to investigate the growth effects of military spending in Pakistan, China and India during the 1990–2018 period. The result showed that military spending is growth-enhancing and has short-run symmetric and long-run asymmetric impacts on the Chinese and Indian economies.…”

Section: Literature Reviewmentioning

confidence: 99%

Revisiting the terrorism–tourism nexus in Nigeria: the moderating role of military spending

Raifu

Afolabi²,

Oguntimehin

2022

JHTI

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PurposeTourism development is critical for economic transformation, particularly in emerging economies. However, the growing spate of terrorism dissuades international tourists, reduces tourism receipts and ultimately hampers the tourism sector's performance. Thus, the government intervenes by altering its military spending to curtail terrorism. Against this backdrop, this study examines the moderating role of military spending in the terrorism–tourism nexus in Nigeria.Design/methodology/approachThe study employs the dynamic ordinary least squares (DOLS) to investigate the moderating role of military spending in the terrorism–tourism nexus in Nigeria. The authors employ the data that cover the period 1995Q1–2019Q4.FindingsThe results reveal that terrorism has a catastrophic effect on tourism arrivals in Nigeria while military spending has a positive impact on tourism arrivals. The results further show the moderating role of military spending in the terrorism–tourism nexus is positive and statistically significant. However, the findings are subject to the measures of military spending, terrorism and tourism.Practical implicationsThe practical implication of the findings is the need for deliberate and strategic budgeting for the Ministry of Defence to combat terrorism, which should not only focus on the procurement of arms and ammunition but also cover the welfare of the military personnel. Nigeria also needs to formulate and implement necessary tourism policies aimed at countering terrorism in a bid to create and maintain a positive image on the global tourist map.Originality/valueMany studies, particularly in developing countries like Nigeria, had examined the effect of terrorism on tourism but none has examined the moderating role of military spending in the terrorism–tourism nexus. Hence, this study examines the moderating role of military spending in the relationship between terrorism and tourism in Nigeria, a terrorism-prone country with several tourist sites.

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“…Using quantile ARDL model, Luqman and Antonakakis (2021) revealed that military spending has a negative influence on economic growth and human development in Palistan. However, for the panel of Pakistan, India, and China according to (Syed, A. A.…”

Section: Literature Reviewmentioning

confidence: 99%

Asymmetric Effect of Military Expenditures on Economic Growth in Pakistan: A Nonlinear-ARDL Approach

Lanrui

Rahman

Khattak

et al. 2022

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The nexus between military expenditure and economic growth has been analyzed using different methods and techniques in the economic growth literature, but most previous findings are indecisive, i.e., non-significant, positive, or negative. The primary purpose of this article was to explain the military expenditure-economic growth nexus in Pakistan by capturing the asymmetrical effects of military expenditures on economic growth using the non-linear autoregressive distribution lag-NARDL technique. Data were analyzed from 1972-2018. The results indicated that a decrease in military spending (adverse shocks) enhanced economic growth in the long term. An increase in military spending (positive shocks) had an insignificant effect on economic growth in Pakistan, suggesting that a focus on cost reduction in military expenditure may benefit economic growth. More so, the Wald test validated the asymmetries both in the long- and short term. Capital formation and labor force, as a control variable, positively affected economic growth in the long run. Based on these findings, the paper offers some critical suggestions for policymakers.

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The Asymmetric Relationship Between Military Expenditure, Economic Growth and Industrial Productivity: An Empirical Analysis of India, China and Pakistan Via the NARDL Approach

Cited by 12 publications

References 34 publications

The effects of military expenditures on labor productivity, innovation and economic growth for the most militarized countries: panel data analysis

The effects of military expenditures on labor productivity, innovation and economic growth for the most militarized countries: panel data analysis

Revisiting the terrorism–tourism nexus in Nigeria: the moderating role of military spending

Asymmetric Effect of Military Expenditures on Economic Growth in Pakistan: A Nonlinear-ARDL Approach

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