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Military expenditures and economic growth in selected developing countries: causality analysis using panel error-correction approach

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dc.contributor.authorHirnissa Mohd Tahir
dc.contributor.authorMuzafar Shah Habibullah
dc.contributor.authorBaharom Abdul Hamid
dc.date.accessioned2017-03-03T03:28:08Z
dc.date.available2017-03-03T03:28:08Z
dc.date.issued2016
dc.description.abstractThis paper examines the causality between military expenditures and economic growth for twenty selecteddeveloping countries. In this paper we test for Granger long-run causality employing the Panel Error-Correction Model (ECM) framework using annual data for the period 1970 to 2005. Military expenditure is measured using the logarithm of the ratio of military expenditures to gross domestic product (milex); while economic growth is proxied by the logarithm of real GDP per capita (rgdppc). Causation (as well as cointegration) is inferred from milex to rgdppc, in a panel setting using the Pooled Mean Group (PMG) estimator proposed by Pesaran et al. (1999) when the Error-Correction (ECM) term is significant in an equation with rgdppc as dependent variable. On the other hand, Granger causality is said to run from rgdppc to milex, when the ECM term is significant in an equation with milex as dependent variable. However, before testing for cointegration or causality, the order of integration of both time-series in a panel setting was tested using the three standard panel unit root tests (Levin et al., 2002; Im et al., 1997; Maddala and Wu, 1999). Our PMG results suggest that the ECM term is significantly different from zero in a model when milex is the dependent variable but not otherwise. The result implies that there is cointegration between military expenditures and economic growth, on average, for all the selected developing countries.en_US
dc.identifier.citationMohd Tahir, Hirnissa and Habibullah, Muzafar Shah and Abdul Hamid, Baharom. (2016). Military expenditures and economic growth in selected developing countries: causality analysis using panel error-correction approach. International Journal of Economic Research, 13 (5), pp. 2113-2130.en_US
dc.identifier.issn0972-9380
dc.identifier.urihttps://ikr.inceif.org/handle/INCEIF/2266
dc.languageEnglish
dc.language.isoengen_US
dc.publisherSerial Publicationsen_US
dc.rights2016. Serials Publications
dc.sourceSEDONA
dc.subjectMilitary expendituresen_US
dc.subjectEconomic growthen_US
dc.subjectCausalityen_US
dc.subjectPooled Mean Groupen_US
dc.subjectDeveloping countriesen_US
dc.titleMilitary expenditures and economic growth in selected developing countries: causality analysis using panel error-correction approachen_US
dc.typeJournal Articleen_US
dlc.maintopicConventional finance
dlc.subtopicEconomics
dspace.entity.typePublication
ikr.doctypeScholarly Works
ikr.topic.maintopicConventional financeen_US
ikr.topic.subtopicConventional financeen_US
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relation.isAuthorOfPublication219f93a8-b38f-400c-981f-6a7162e44a2f
relation.isAuthorOfPublication.latestForDiscovery219f93a8-b38f-400c-981f-6a7162e44a2f
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