The Relationship Between Defense Expenditures and Economic Growth: Rolling-Window Causality Test

Yıl 2022, Cilt: 20 Sayı: 4, 42 - 55, 31.12.2022

Mustafa Zuhal

https://doi.org/10.11611/yead.1166390

Öz

Defense expenditures have an essential place in the growth of countries. Defense expenditures and economic growth are frequently linked in the literature. The relationship between these variables may alter according to time and country-specific characteristics. This study examines the causality relationship between defense expenditures and economic growth with the rolling-window causality. For all panels, the study found bidirectional causality only in China and unidirectional causality in S. Korea and the UK. On the other hand, the rolling-window causality test detected bidirectional causality between the variables in all countries except the USA. Economic growth and defense expenditures have a unidirectional causality in the USA.

Anahtar Kelimeler

Defense Expenditures, Economic Growth, Rolling-Window Causality

Kaynakça

• Benoit, E. (1978). Growth and Defense in Developing Countries. Economic Development and Cultural Change, Vol. 26, No. 2, 271-280.
• Chang, H.-C., Huang, B.-N., & Yang, C. (2011). Military expenditure and economic growth across different groups: A dynamic panel Granger-causality approach. Economic Modelling 28, 2416–2423.
• Chang, T., Lee, C.-C., Hung, K., & Lee, K.-H. (2014). Does Military Spending Really Matter for Economic Growth in China and G7 Countries: The Roles of Dependency and Heterogeneity. Defence and Peace Economics, 25:2, , 177-191.
• Chen, P.-F., Lee, C.-C., & Chiu, Y.-B. (2014). The nexus between defense expenditure and economic growth: New global evidence. Economic Modelling 36, 474–483.
• Chowdhury, A. (1991). A Causal Analysis of Defense Spending and Economic Growth. Journal Of Conflict Resolution, Vol. 35 No. 1, 80-97.
• Dakurah, A., Davies, S., & Sampath, R. (2001). Defense spending and economic growth in developing countries A causality analysis. Journal of Policy Modeling 23, 651–658.
• Deger, S. (1986). Economic Development and Defense Expenditure. Economic Development and Cultural Change, Vol. 35, No. 1, 179-196.
• Hatemi-J, A., Chang, T., Chen, W.-Y., Lin, F.-L., & Gupta, R. (2018). Asymmetric causality between military expenditures and economic growth in top six defense spenders. Qual Quant 52, 1193–1207.
• Kollias, C., Manolas, G., & Paleologou, S.-M. (2004). Defence expenditure and economic growth in the European Union A causality analysis. Journal of Policy Modeling 26 , 553–569.
• Kónya, L. (2006). Exports and growth: Granger causality analysis on OECD countries with a panel data approach. Economic Modelling 23 , 978–992.
• LaCivita, C., & Frederiksen, P. (1991). Defense spending and economic growth An alternative approach to the causality issue. Journal of Development Economics 35, 117-126.
• Malizard, J. (2010). Causality Between Economic Growth and Military Expenditure: The Case of France. Defense & Security Analysis, 26:4, 401-413.
• Menyah, K., Nazlıoğlu, Ş., & Rufael, Y. (2014). Financial development, trade openness and economic growth in African countries: New insights from a panel causality approach. Economic Modelling 37 , 386–394.
• Pesaran, M. (2021). General diagnostic tests for cross-sectional dependence in panels. Empirical Economics 60, 13–50.
• Pesaran, M., & Yamagata, T. (2008). Testing slope homogeneity in large panels. Journal of Econometrics 142, 50–93.
• Pesaran, M., Ullah, A., & Yamagata, T. (2008). A bias-adjusted LM test of error cross-section independence. The Econometrics Journal , 2008, Vol. 11, No. 1, 105-127.
• Pesaran,, H. (2004). General Diagnostic Tests for Cross Section Dependence in Panels,. Discussion Paper No. 1240,, 1-39.
• Su, C., Xu, Y., Chang, H., Lobont, O.-R., & Liu, Z. (2020). Dynamic Causalities between Defense Expenditure and Economic Growth in China: Evidence from Rolling Granger Causality Test. Defence and Peace Economics 31:5 , 565-582.
• Ün, T. (2018). Panel Veri Modellerinin Varsayımlarının Testi. S. Güriş içinde, Uygulamalı Panel Veri Ekonometrisi (s. 73-101). İstanbul: Der Yayınları.
• WorldBank. (2022, 01 18). World Development Indicators. https://databank.worldbank.org/source/world-development-indicators adresinden alındı
• Yılancı, V., & Özgür, Ö. (2019). Testing the environmental Kuznets curve for G7 countries: evidence from a bootstrap panel causality test in rolling windows. Environmental Science and Pollution Research 26, 24795–24805.
• Yılgör, M., Karagöl, E., & Saygılı, Ç. (2014). Panel Causality Analysis Between Defence Expenditure And Economic Growth In Developed Countries. Defence and Peace Economics, Vol. 25, No. 2, , 193–203.
• Zhong, M., Chang, T., Goswami, S., Gupta, R., & Lou, T.-W. (2017). The Nexus Between Mılıtary Expendıtures And Economıc Growth In The BRICS and The US: An Empirical Note. Defence and Peace Economics, Vol. 28, No. 5, , 609–620.