Defense Expenditures and Economic Growth Relationship: Panel Threshold Analysis for OECD Countries

Abstract

Since Benoit's (1973) work, which argued that defense spending positively affects economic growth, the effects of defense spending on economic growth have been widely examined, and different theories have been developed. Linear models are generally used in the study of this topic. Considering that many economic variables may have a nonlinear generating mechanism, it is found that this is neglected in studies of defense spending and economic growth. This study examines the relationship between defense spending and economic growth using the panel threshold model for 17 OECD countries. According to empirical results, a linear relationship between defense expenditures and economic growth could not be observed. This result shows that the effect of defense spending on economic growth can change with the threshold value. The findings suggest that defense spending above (below) the threshold of 0.599 positively (negatively) influences economic growth. Key Words:Defense Spending,Economic Growth,OECD Countries,Panel Threshold Model. JEL Classification: H50, O40, C50.

Project Number

Yok

Savunma Harcamaları ve Ekonomik Büyüme İlişkisi: OECD Ülkeleri İçin Panel Eşik Değer Analizi

Abstract

Benoit’in (1973) savunma harcamalarının ekonomik büyümeyi olumlu etkilediğini ileri süren çalışmasından bu yana, savunma harcamalarının ekonomik büyüme üzerindeki etkileri kapsamlı bir şekilde incelenmiş ve birbirinden farklı teoriler geliştirilmiştir. Bu konunun incelenmesinde genellikle doğrusal modeller kullanılmıştır. Birçok ekonomik değişkenin doğrusal olmayan bir veri yaratma mekanizmasına sahip olabileceği düşünüldüğünde, savunma harcamaları ve ekonomik büyüme konusunda yapılan çalışmalarda bu durumun ihmal edildiği görülmektedir. Bu çalışma, savunma harcamaları ve ekonomik büyüme ilişkisini panel eşik değer modeli kullanarak 17 OECD ülkesi için incelemektedir. Ampirik sonuçlara göre, savunma harcamaları ve ekonomik büyüme arasında lineer bir ilişki gözlenememiştir. Bu sonuç, savunma harcamalarının ekonomik büyümeye olan etkisinin eşik değere bağlı olarak değişebileceğini göstermektedir. Analiz sonuçlarına göre, savunma harcama oranı 0.599 eşiğinin üzerindeki (altındaki) durumda, ekonomik büyümeye olan etkisi pozitif (negatif) görünmektedir. Anahtar Kelimeler: Savunma Harcamaları, Ekonomik Büyüme, OECD Ülkeleri, Panel Eşik Regresyon Analizi. JEL Sınıflandırması: H50, O40, C50.

Keywords

• Savunma Harcamaları
• Ekonomik Büyüme
• OECD Ülkeleri
• Panel Eşik Regresyon Analizi

Supporting Institution

Yok

Project Number

Yok

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