MILITARY EXPENDITURE AND ECONOMIC GROWTH IN DEVELOPING COUNTRIES: EVIDENCE FROM SYSTEM GMM ESTIMATES |
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| Authors: | Na Hou Bo Chen |
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| Institution: | 1. Institute of Defence Economics and Management, Central University of Finance and Economics , Beijing , China hou_na@hotmail.com;3. Institute of Defence Economics and Management, Central University of Finance and Economics , Beijing , China |
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| Abstract: | The effect of military expenditure on economic growth in developing countries has been investigated by many empirical literatures. However, there is little consensus of that effect and the diversity seems to come from the use of different models and different estimators. This article applies the Augmented Solow Growth Model to examine the influence of military expenditure on economic growth for 35 developing countries over the period of 1975–2009. By using the system Generalized Method of Moments (GMM) estimators, empirical results indicate that defence has a negative and significant effect on economic growth in the sample countries. |
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| Keywords: | Military expenditure The Augmented Solow Growth Model Developing countries System GMM estimates |
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