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The Relationship between Military Expenditure, Economic Growth, and Environmental Pollution: Evidence from Causality Test with Structural Breaks for Turkey

Year 2020, Volume: 5 Issue: 2, 261 - 275, 31.08.2020
https://doi.org/10.30784/epfad.710276

Abstract

In this study, the relationship between military expenditure, economic growth, and environmental pollution were examined for Turkey for the period 1961-2016. Stationary degrees of the variables in the study were investigated using the Fourier Augmented Dickey-Fuller unit root test, which allowed smooth structural breaks. The results show that all the variables are stationary at the first differences while they have a unit root at the levels. In the study, causality between variables was investigated using the Fourier Toda-Yamamoto causality test, which allows smooth structural breaks and traditional Toda-Yamamoto causality test. According to the causality test results, there was a causality between economic growth and military spending. The direction of causality detected is from economic growth to military spending. On the other hand, there was no causal relationships between other variables for both tests. The determination of the causality detected using the Fourier Toda-Yamamoto causality test shows the importance of structural breaks in causal relationships. As a result of the study, it is seen that a sustainable economic growth is important in terms of being a source of military expenditures. These results are expected to be a guide for policy makers.

References

  • Acheampong, A. O. (2018). Economic growth, CO2 emissions and energy consumption: What causes what and where? Energy Economics, 74, 677-692. https://doi.org/10.1016/j.eneco.2018.07.022
  • Ahmad, N. and Du, L. (2017). Effects of energy production and CO2 emissions on economic growth in Iran: ARDL approach. Energy, 123, 521-537. https://doi.org/10.1016/j.energy.2017.01.144
  • Ahmed, S. Alam, K., Rashid, A., and Gow, J. (2019). Militarisation, energy consumption, CO2 emissions and economic growth in Myanmar. Defence and Peace Economics, 1-27. https://doi.org/10.1080/10242694.2018.1560566
  • Becker, R., Enders, W. and Hurn, S. (2004). A general test for time dependence in parameters. Journal of Applied Econometrics, 19(7), 899-906. https://doi.org/10.1002/jae.751
  • Becker, R., Enders, W. and Lee, J. (2006). A stationarity test in the presence of an unknown number of smooth breaks. Journal of Time Series Analysis, 27(3), 381-409. https://doi.org/10.1111/j.1467-9892.2006.00478.x
  • Bekhet, H. A., Matar, A. and Yasmin, T. (2017). CO2 emissions, energy consumption, economic growth, and financial development in GCC countries: Dynamic simultaneous equation models. Renewable and Sustainable Energy Reviews, 70, 117-132. https://doi.org/10.1016/j.rser.2016.11.089
  • Bildirici, M. (2017a). CO2 emissions and militarization in G7 countries: Panel cointegration and trivariate causality approaches. Environment and Development Economics, 22(6), 771-791. https://doi.org/10.1017/S1355770X1700016X
  • Bildirici, M. E. (2017b). Militarization, economic growth and petroleum consumption in Brazil, Russian, India, China, Turkey, South Africa and Mexico. Economic Computation & Economic Cybernetics Studies & Research, 51(2). http://www.ecocyb.ase.ro/
  • Bildirici, M. E. (2017c). The causal link among militarization, economic growth, CO 2 emission, and energy consumption. Environmental Science and Pollution Research, 24(5), 4625-4636. https://doi.org/10.1007/s11356-016-8158-z
  • Bildirici, M. (2018). Impact of militarization and economic growth on biofuels consumption and CO2 emissions: The evidence from Brazil, China, and US. Environmental Progress & Sustainable Energy, 37(3), 1121-1131. https://doi.org/10.1002/ep.12720
  • Bildirici, M. (2019). CO2 emissions and militarisation in G20 countries: Panel cointegratrion and causality approaches. International Journal of Oil, Gas and Coal Technology, 22(1), 104-121. https://doi.org/10.1504/IJOGCT.2019.102279
  • Bouznit, M. and Pablo-Romero, M. D. P. (2016). CO2 emission and economic growth in Algeria. Energy Policy, 96, 93-104. https://doi.org/10.1016/j.enpol.2016.05.036
  • Chen, Y., Wang, Z. and Zhong, Z. (2019). CO2 emissions, economic growth, renewable and non-renewable energy production and foreign trade in China. Renewable Energy, 131, 208-216. https://doi.org/10.1016/j.renene.2018.07.047
  • Cherni, A. and Jouini, S. E. (2017). An ARDL approach to the CO2 emissions, renewable energy and economic growth nexus: Tunisian evidence. International Journal of Hydrogen Energy, 42(48), 29056-29066. https://doi.org/10.1016/j.ijhydene.2017.08.072
  • Clark, B. and Jorgenson, A. K. (2012). The treadmill of destruction and the environmental impacts of militaries. Sociology Compass, 6(7), 557-569. https://doi.org/10.1111/j.1751-9020.2012.00474.x
  • Clark, B., Jorgenson, A. K. and Kentor, J. (2010). Militarization and energy consumption: A test of treadmill of destruction theory in comparative perspective. International Journal of Sociology, 402, 23–43. https://doi.org/10.2753/IJS0020-7659400202
  • EIA, U. (2015). US energy information administration. Retrieved from https://www.eia.gov/
  • Enders, W. and Lee, J. (2012). A unit root test using a Fourier series to approximate smooth breaks. Oxford Bulletin of Economics and Statistics, 74(4), 574-599. https://doi.org/10.1111/j.1468-0084.2011.00662.x
  • Gökmenoğlu, K. K. and Sadeghieh, M. (2019). Financial development, CO2 emissions, fossil fuel consumption and economic growth: The case of Turkey. Strategic Planning for Energy and the Environment, 38(4), 7-28. https://doi.org/10.1080/10485236.2019.12054409
  • Gökmenoğlu, K. and Taşpınar, N. (2016). The relationship between CO2 emissions, energy consumption, economic growth and FDI: The case of Turkey. The Journal of International Trade & Economic Development, 25(5), 706-723. https://doi.org/10.1080/09638199.2015.1119876
  • Görüş, M. S. and Aydın, M. (2019). The relationship between energy consumption, economic growth, and CO2 emission in MENA countries: Causality analysis in the frequency domain. Energy, 168, 815-822. https://doi.org/10.1016/j.energy.2018.11.139
  • Grossman, G. M. and Krueger, A. B. (1991). Environmental impacts of a North American free trade agreement (NBER Working Paper No. 3914). Retrieved from https://www.nber.org/papers/w3914
  • Kahia, M., Jebli, M. B. and Belloumi, M. (2019). Analysis of the impact of renewable energy consumption and economic growth on carbon dioxide emissions in 12 MENA countries. Clean Technologies and Environmental Policy, 21(4), 871-885. https://doi.org/10.1007/s10098-019-01676-2
  • Lee, J. and Strazicich, M. (2013). Minimum LM unit root test with one structural break. Economics Bulletin, 33(4), 2483-2492. Retrieved from https://www.scimagojr.com/economic
  • Lee, J. and Strazicich, M. C. (2003). Minimum lagrange multiplier unit root test with two structural breaks. Review of Economics and Statistics, 85(4), 1082-1089. https://doi.org/10.1162/003465303772815961
  • Lumsdaine, R. L. and Papell, D. H. (1997). Multiple trend breaks and the unit-root hypothesis. Review of Economics and Statistics, 79(2), 212-218. https://doi.org/10.1162/003465397556791
  • Mikayilov, J. I., Galeotti, M. and Hasanov, F. J. (2018). The impact of economic growth on CO2 emissions in Azerbaijan. Journal of Cleaner Production, 197, 1558-1572. https://doi.org/10.1016/j.jclepro.2018.06.269
  • Nazlıoğlu, S., Görmüş A. and Soytaş, U. (2016). Oil prices and real estate investment trusts (REITs): Gradual-shift causality and volatility transmission analysis. Energy Economics, 60, 1-28. https://doi.org/10.1016/j.eneco.2016.09.009
  • Öztürk, I. and Acaravcı, A. (2010). CO2 emissions, energy consumption and economic growth in Turkey. Renewable and Sustainable Energy Reviews, 14(9), 3220-3225. https://doi.org/10.1016/j.rser.2010.07.005
  • Pata, U. K. (2018). Renewable energy consumption, urbanization, financial development, income and CO2 emissions in Turkey: Testing EKC hypothesis with structural breaks. Journal of Cleaner Production, 187, 770-779. https://doi.org/10.1016/j.jclepro.2018.03.236
  • Perron, P. (1989). The great crash, the oil price shock, and the unit root hypothesis. Econometrica: Journal of the Econometric Society, 57(6), 1361-1401. https://doi.org/10.2307/1913712
  • Perron P. (1994) Trend, unit root and structural change in macroeconomic time series. In Rao B.B. (Ed.), Cointegration (pp. 113-146). London: Palgrave Macmillan.
  • Smith, G. (1990). How fuel-efficient is the Pentagon? Military’s oil addiction. Earth Island Journal, Winter(1). Retrieved from https://www.earthisland.org/journal/
  • Sohag, K., Taşkın, F. D. and Malik, M. N. (2019). Green economic growth, cleaner energy and militarization: Evidence from Turkey. Resources Policy, 63(C), 101407. https://doi.org/10.1016/j.resourpol.2019.101407
  • Toda, H. Y. and Yamamoto, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of Econometrics, 66(1-2), 225-250. https://doi.org/10.1016/0304-4076(94)01616-8
  • Wiedmann, T. and Minx, J. (2008). A definition of ‘carbon footprint’. Ecological Economics Research Trends, 1, 1-11. Retrieved from https://www.semanticscholar.org/
  • Zhang, B., Wang, Z. and Wang, B. (2018). Energy production, economic growth and CO 2 emission: Evidence from Pakistan. Natural Hazards, 90(1), 27-50. https://doi.org/10.1007/s11069-017-3031-z
  • Zivot, E. and Andrews, D. W. K. (2002). Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. Journal of Business & Economic Statistics, 20(1), 25-44. https://doi.org/10.1198/073500102753410372

Askeri Harcamalar, Ekonomik Büyüme ve Çevre Kirliliği Arasındaki İlişki: Türkiye İçin Yapısal Kırılmalı Nedensellik Testinden Kanıtlar

Year 2020, Volume: 5 Issue: 2, 261 - 275, 31.08.2020
https://doi.org/10.30784/epfad.710276

Abstract

Bu çalışmada askeri harcamalar, ekonomik büyüme ve çevre kirliliği arasındaki ilişki Türkiye için 1961-2016 dönemi verileri kullanılarak incelenmiştir. Çalışmada değişkenlerin durağanlık dereceleri yumuşak yapısal kırılmalara izin veren Fourier Augmented Dickey-Fuller birim kök testi kullanılarak incelenmiştir. Birim kök sonuçları değişkenlerin seviyelerinde birim köklü iken birinci farklarında farklı anlamlılık düzeylerinde durağan olduğunu göstermektedir. Çalışmada değişkenler arasındaki nedensellik ise Toda-Yamamoto nedensellik testinin yanında literatüre yeni kazandırılmış yapısal kırılmalara izin veren Fourier Toda-Yamamoto nedensellik testi kullanılarak incelenmiştir. Nedensellik testi sonuçlarına göre yalnızca ekonomik büyüme ile askeri harcamalar arasında bir nedensellik tespit edilmiştir. Tespit edilen nedenselliğin yönü ise ekonomik büyümeden askeri harcamalara doğrudur. Diğer değişkenler arasında ise bir nedensellik tespit edilememiştir. Tespit edilen nedensel ilişkinin yapısal kırılmalara izin veren Fourier Toda-Yamamoto nedensellik testi kullanılarak tespit edilmiş olması yapısal kırılmaların nedensel ilişkilerdeki önemini ortaya koymaktadır. Çalışmanın genel sonuçlarına göre sürdürülebilir bir ekonomik büyümenin askeri harcamalara kaynak olması bakımından önemli olduğu görülmektedir. Bu sonuçların politika yapıcılar için yol gösterici olması beklenmektedir.

References

  • Acheampong, A. O. (2018). Economic growth, CO2 emissions and energy consumption: What causes what and where? Energy Economics, 74, 677-692. https://doi.org/10.1016/j.eneco.2018.07.022
  • Ahmad, N. and Du, L. (2017). Effects of energy production and CO2 emissions on economic growth in Iran: ARDL approach. Energy, 123, 521-537. https://doi.org/10.1016/j.energy.2017.01.144
  • Ahmed, S. Alam, K., Rashid, A., and Gow, J. (2019). Militarisation, energy consumption, CO2 emissions and economic growth in Myanmar. Defence and Peace Economics, 1-27. https://doi.org/10.1080/10242694.2018.1560566
  • Becker, R., Enders, W. and Hurn, S. (2004). A general test for time dependence in parameters. Journal of Applied Econometrics, 19(7), 899-906. https://doi.org/10.1002/jae.751
  • Becker, R., Enders, W. and Lee, J. (2006). A stationarity test in the presence of an unknown number of smooth breaks. Journal of Time Series Analysis, 27(3), 381-409. https://doi.org/10.1111/j.1467-9892.2006.00478.x
  • Bekhet, H. A., Matar, A. and Yasmin, T. (2017). CO2 emissions, energy consumption, economic growth, and financial development in GCC countries: Dynamic simultaneous equation models. Renewable and Sustainable Energy Reviews, 70, 117-132. https://doi.org/10.1016/j.rser.2016.11.089
  • Bildirici, M. (2017a). CO2 emissions and militarization in G7 countries: Panel cointegration and trivariate causality approaches. Environment and Development Economics, 22(6), 771-791. https://doi.org/10.1017/S1355770X1700016X
  • Bildirici, M. E. (2017b). Militarization, economic growth and petroleum consumption in Brazil, Russian, India, China, Turkey, South Africa and Mexico. Economic Computation & Economic Cybernetics Studies & Research, 51(2). http://www.ecocyb.ase.ro/
  • Bildirici, M. E. (2017c). The causal link among militarization, economic growth, CO 2 emission, and energy consumption. Environmental Science and Pollution Research, 24(5), 4625-4636. https://doi.org/10.1007/s11356-016-8158-z
  • Bildirici, M. (2018). Impact of militarization and economic growth on biofuels consumption and CO2 emissions: The evidence from Brazil, China, and US. Environmental Progress & Sustainable Energy, 37(3), 1121-1131. https://doi.org/10.1002/ep.12720
  • Bildirici, M. (2019). CO2 emissions and militarisation in G20 countries: Panel cointegratrion and causality approaches. International Journal of Oil, Gas and Coal Technology, 22(1), 104-121. https://doi.org/10.1504/IJOGCT.2019.102279
  • Bouznit, M. and Pablo-Romero, M. D. P. (2016). CO2 emission and economic growth in Algeria. Energy Policy, 96, 93-104. https://doi.org/10.1016/j.enpol.2016.05.036
  • Chen, Y., Wang, Z. and Zhong, Z. (2019). CO2 emissions, economic growth, renewable and non-renewable energy production and foreign trade in China. Renewable Energy, 131, 208-216. https://doi.org/10.1016/j.renene.2018.07.047
  • Cherni, A. and Jouini, S. E. (2017). An ARDL approach to the CO2 emissions, renewable energy and economic growth nexus: Tunisian evidence. International Journal of Hydrogen Energy, 42(48), 29056-29066. https://doi.org/10.1016/j.ijhydene.2017.08.072
  • Clark, B. and Jorgenson, A. K. (2012). The treadmill of destruction and the environmental impacts of militaries. Sociology Compass, 6(7), 557-569. https://doi.org/10.1111/j.1751-9020.2012.00474.x
  • Clark, B., Jorgenson, A. K. and Kentor, J. (2010). Militarization and energy consumption: A test of treadmill of destruction theory in comparative perspective. International Journal of Sociology, 402, 23–43. https://doi.org/10.2753/IJS0020-7659400202
  • EIA, U. (2015). US energy information administration. Retrieved from https://www.eia.gov/
  • Enders, W. and Lee, J. (2012). A unit root test using a Fourier series to approximate smooth breaks. Oxford Bulletin of Economics and Statistics, 74(4), 574-599. https://doi.org/10.1111/j.1468-0084.2011.00662.x
  • Gökmenoğlu, K. K. and Sadeghieh, M. (2019). Financial development, CO2 emissions, fossil fuel consumption and economic growth: The case of Turkey. Strategic Planning for Energy and the Environment, 38(4), 7-28. https://doi.org/10.1080/10485236.2019.12054409
  • Gökmenoğlu, K. and Taşpınar, N. (2016). The relationship between CO2 emissions, energy consumption, economic growth and FDI: The case of Turkey. The Journal of International Trade & Economic Development, 25(5), 706-723. https://doi.org/10.1080/09638199.2015.1119876
  • Görüş, M. S. and Aydın, M. (2019). The relationship between energy consumption, economic growth, and CO2 emission in MENA countries: Causality analysis in the frequency domain. Energy, 168, 815-822. https://doi.org/10.1016/j.energy.2018.11.139
  • Grossman, G. M. and Krueger, A. B. (1991). Environmental impacts of a North American free trade agreement (NBER Working Paper No. 3914). Retrieved from https://www.nber.org/papers/w3914
  • Kahia, M., Jebli, M. B. and Belloumi, M. (2019). Analysis of the impact of renewable energy consumption and economic growth on carbon dioxide emissions in 12 MENA countries. Clean Technologies and Environmental Policy, 21(4), 871-885. https://doi.org/10.1007/s10098-019-01676-2
  • Lee, J. and Strazicich, M. (2013). Minimum LM unit root test with one structural break. Economics Bulletin, 33(4), 2483-2492. Retrieved from https://www.scimagojr.com/economic
  • Lee, J. and Strazicich, M. C. (2003). Minimum lagrange multiplier unit root test with two structural breaks. Review of Economics and Statistics, 85(4), 1082-1089. https://doi.org/10.1162/003465303772815961
  • Lumsdaine, R. L. and Papell, D. H. (1997). Multiple trend breaks and the unit-root hypothesis. Review of Economics and Statistics, 79(2), 212-218. https://doi.org/10.1162/003465397556791
  • Mikayilov, J. I., Galeotti, M. and Hasanov, F. J. (2018). The impact of economic growth on CO2 emissions in Azerbaijan. Journal of Cleaner Production, 197, 1558-1572. https://doi.org/10.1016/j.jclepro.2018.06.269
  • Nazlıoğlu, S., Görmüş A. and Soytaş, U. (2016). Oil prices and real estate investment trusts (REITs): Gradual-shift causality and volatility transmission analysis. Energy Economics, 60, 1-28. https://doi.org/10.1016/j.eneco.2016.09.009
  • Öztürk, I. and Acaravcı, A. (2010). CO2 emissions, energy consumption and economic growth in Turkey. Renewable and Sustainable Energy Reviews, 14(9), 3220-3225. https://doi.org/10.1016/j.rser.2010.07.005
  • Pata, U. K. (2018). Renewable energy consumption, urbanization, financial development, income and CO2 emissions in Turkey: Testing EKC hypothesis with structural breaks. Journal of Cleaner Production, 187, 770-779. https://doi.org/10.1016/j.jclepro.2018.03.236
  • Perron, P. (1989). The great crash, the oil price shock, and the unit root hypothesis. Econometrica: Journal of the Econometric Society, 57(6), 1361-1401. https://doi.org/10.2307/1913712
  • Perron P. (1994) Trend, unit root and structural change in macroeconomic time series. In Rao B.B. (Ed.), Cointegration (pp. 113-146). London: Palgrave Macmillan.
  • Smith, G. (1990). How fuel-efficient is the Pentagon? Military’s oil addiction. Earth Island Journal, Winter(1). Retrieved from https://www.earthisland.org/journal/
  • Sohag, K., Taşkın, F. D. and Malik, M. N. (2019). Green economic growth, cleaner energy and militarization: Evidence from Turkey. Resources Policy, 63(C), 101407. https://doi.org/10.1016/j.resourpol.2019.101407
  • Toda, H. Y. and Yamamoto, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of Econometrics, 66(1-2), 225-250. https://doi.org/10.1016/0304-4076(94)01616-8
  • Wiedmann, T. and Minx, J. (2008). A definition of ‘carbon footprint’. Ecological Economics Research Trends, 1, 1-11. Retrieved from https://www.semanticscholar.org/
  • Zhang, B., Wang, Z. and Wang, B. (2018). Energy production, economic growth and CO 2 emission: Evidence from Pakistan. Natural Hazards, 90(1), 27-50. https://doi.org/10.1007/s11069-017-3031-z
  • Zivot, E. and Andrews, D. W. K. (2002). Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. Journal of Business & Economic Statistics, 20(1), 25-44. https://doi.org/10.1198/073500102753410372
There are 38 citations in total.

Details

Primary Language Turkish
Subjects Economics
Journal Section Makaleler
Authors

Mücahit Aydın 0000-0002-4934-0191

Publication Date August 31, 2020
Acceptance Date August 26, 2020
Published in Issue Year 2020 Volume: 5 Issue: 2

Cite

APA Aydın, M. (2020). Askeri Harcamalar, Ekonomik Büyüme ve Çevre Kirliliği Arasındaki İlişki: Türkiye İçin Yapısal Kırılmalı Nedensellik Testinden Kanıtlar. Ekonomi Politika Ve Finans Araştırmaları Dergisi, 5(2), 261-275. https://doi.org/10.30784/epfad.710276

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