Effects of military expenditure on economic growth and investment in selected countries

The objective of this study is investigate the relationship between military expenditure,economic growth and investment in a global perspective covering 86 selected countries,which comprises OECD and developing countries for the period 1989 to 2006. The main objective in this study is to determine t...

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Main Author:	Mohd Tahir, Hirnissa
Format:	Thesis
Language:	English
Published:	2012
Subjects:	Armed Forces - Appropriations and expenditures Economic development Investments
Online Access:	http://psasir.upm.edu.my/id/eprint/32263/1/FEP%202012%202R.pdf
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id	my-upm-ir.32263
record_format	uketd_dc
spelling	my-upm-ir.322632015-01-16T09:01:01Z Effects of military expenditure on economic growth and investment in selected countries 2012-05 Mohd Tahir, Hirnissa The objective of this study is investigate the relationship between military expenditure,economic growth and investment in a global perspective covering 86 selected countries,which comprises OECD and developing countries for the period 1989 to 2006. The main objective in this study is to determine the impact of military expenditure on economic growth as well as the impact of economic growth on military expenditure, while the second objective is to determine the factors affecting the demand for military expenditure, and the third objective is to determine the impacts of military expenditure on investment. To achieve these objectives, we employed the Generalized Method of Moment (GMM) estimator popularized by Arellano and Bond (1991), and Blundell and Bond (1998). For this purpose, we used macroeconomic and institutional variables such as population, openness, trade balance, government expenditure, gross domestic product per capita, foreign direct investment, lending rate, polity, international warfare and regional societal as explanatory variable. Our result suggests that military expenditure has negative impact on growth, while economic growth has positive impact on military expenditure. Our result also suggests that income level, openness, trade balance, polity and regional and civil disturbance are important determinants for military expenditure. Finally our results further suggest that military expenditure, foreign direct investment, lending rate, openness and regional disturbance are important determinants for investment expenditure. As conclusions this study indicate that spending on military is unproductive venture because do not contribute to economic growth, while income does has an impact on the level of military expenditure. Lessons that could be learned by policy makers is that they could cautiously plan the national budget in order not to overspend on military expenditure and depriving other productive sectors such as education and health. Armed Forces - Appropriations and expenditures Economic development Investments 2012-05 Thesis http://psasir.upm.edu.my/id/eprint/32263/ http://psasir.upm.edu.my/id/eprint/32263/1/FEP%202012%202R.pdf application/pdf en public phd doctoral Universiti Putra Malaysia Armed Forces - Appropriations and expenditures Economic development Investments Faculty of Economics and Management
institution	Universiti Putra Malaysia
collection	PSAS Institutional Repository
language	English
topic	Armed Forces - Appropriations and expenditures Economic development Investments
spellingShingle	Armed Forces - Appropriations and expenditures Economic development Investments Mohd Tahir, Hirnissa Effects of military expenditure on economic growth and investment in selected countries
description	The objective of this study is investigate the relationship between military expenditure,economic growth and investment in a global perspective covering 86 selected countries,which comprises OECD and developing countries for the period 1989 to 2006. The main objective in this study is to determine the impact of military expenditure on economic growth as well as the impact of economic growth on military expenditure, while the second objective is to determine the factors affecting the demand for military expenditure, and the third objective is to determine the impacts of military expenditure on investment. To achieve these objectives, we employed the Generalized Method of Moment (GMM) estimator popularized by Arellano and Bond (1991), and Blundell and Bond (1998). For this purpose, we used macroeconomic and institutional variables such as population, openness, trade balance, government expenditure, gross domestic product per capita, foreign direct investment, lending rate, polity, international warfare and regional societal as explanatory variable. Our result suggests that military expenditure has negative impact on growth, while economic growth has positive impact on military expenditure. Our result also suggests that income level, openness, trade balance, polity and regional and civil disturbance are important determinants for military expenditure. Finally our results further suggest that military expenditure, foreign direct investment, lending rate, openness and regional disturbance are important determinants for investment expenditure. As conclusions this study indicate that spending on military is unproductive venture because do not contribute to economic growth, while income does has an impact on the level of military expenditure. Lessons that could be learned by policy makers is that they could cautiously plan the national budget in order not to overspend on military expenditure and depriving other productive sectors such as education and health.
format	Thesis
qualification_name	Doctor of Philosophy (PhD.)
qualification_level	Doctorate
author	Mohd Tahir, Hirnissa
author_facet	Mohd Tahir, Hirnissa
author_sort	Mohd Tahir, Hirnissa
title	Effects of military expenditure on economic growth and investment in selected countries
title_short	Effects of military expenditure on economic growth and investment in selected countries
title_full	Effects of military expenditure on economic growth and investment in selected countries
title_fullStr	Effects of military expenditure on economic growth and investment in selected countries
title_full_unstemmed	Effects of military expenditure on economic growth and investment in selected countries
title_sort	effects of military expenditure on economic growth and investment in selected countries
granting_institution	Universiti Putra Malaysia
granting_department	Faculty of Economics and Management
publishDate	2012
url	http://psasir.upm.edu.my/id/eprint/32263/1/FEP%202012%202R.pdf
_version_	1747811655528480768

Effects of military expenditure on economic growth and investment in selected countries

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