Military Expenditure and Economic Growth: Theoretical and Empirical Studies

• Main Authors: Li-an Wang, 王立安
• Other Authors: Fuh-mei Wang
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/88974516586192907276

碩士 === 國立成功大學 === 經濟學系碩博士班 === 97 === Based on the endogenous growth theory and dynamic panel GMM methods, this research examines the influence of military expenditure on economic growth. The observed countries are composed of classical trivial countries over the period from 1990 to 2002, NATO over the period from 1990 to 2006, the middle east countries over the period from 1990 to 2005 and high military expenditure countries over the period from 1992 to 2006. Theoretical results indicate that a threshold of military expenditure exists. If the home country military expenditure smaller than such critical value, an increase in home country military expenditure is associated faster economic growth domestically. After such threshold, domestic economic growth rate decreases with home country military expenditure. Domestic economic growth should be a non-linear concave function of home country military expenditures. The relationship between foreign country military expenditures and domestic economic growth presents similarly. Empirical findings reveal that, experiences of classical trivial countries is line with theoretical result that domestic economic growth is a non-linear concave function of home country military expenditure. Yet, an increase in foreign country military expenditure leads to faster domestic economic growth. Experiences of NATO and high-military-expenditure countries present that the relationship between home or foreign country military expenditure and domestic economic growth is non-linear. Differently, estimation results of the Middle East countries show that domestic economic growth is a non-linear convex function of home and foreign countries’ military expenditure, which is in contrast with the theoretical findings.