In this study, we use the ARDL bounds testing procedure suggested by Pesaran （2001） and modified version of the Granger causality test proposed by Toda and Yamamoto （1995） to test the robustness of the causality e...In this study, we use the ARDL bounds testing procedure suggested by Pesaran （2001） and modified version of the Granger causality test proposed by Toda and Yamamoto （1995） to test the robustness of the causality effect between military expenditure and economic growth in 4 Asian countries, two industrial countries （South Korea and Malaysia）, and others are developing countries （Iran and Saudi Arabia）, from 1988 to 2006 years, data series obtained from word development indicator （WDI）. With respect to that military expenditure can affect economic growth so increase in GDP can increase or decrease military expenditure, too. We investigate the causality relationship between military expenditure and economic growth because the purpose of military expenditures is to provide national security. The results show that Iran and Saudi Arabia don＇t have any causality relationship between military expenditure and economic growth. The results of South Korea show a unidirectional relationship from LGDP （Logarithm of real GDP） and LGDPK （logarithm of real GDP per capita） to military expenditure, and in Malaysia there is unidirectional relationship from LGDPK to military expenditure. The comparison of these results, we can say that developing countries don＇t have meaningful relationship between military expenditure and economic growth, but we can find unidirectional or bidirectional relationship between military expenditure and economic growth in industrial countries.展开更多
文摘In this study, we use the ARDL bounds testing procedure suggested by Pesaran （2001） and modified version of the Granger causality test proposed by Toda and Yamamoto （1995） to test the robustness of the causality effect between military expenditure and economic growth in 4 Asian countries, two industrial countries （South Korea and Malaysia）, and others are developing countries （Iran and Saudi Arabia）, from 1988 to 2006 years, data series obtained from word development indicator （WDI）. With respect to that military expenditure can affect economic growth so increase in GDP can increase or decrease military expenditure, too. We investigate the causality relationship between military expenditure and economic growth because the purpose of military expenditures is to provide national security. The results show that Iran and Saudi Arabia don＇t have any causality relationship between military expenditure and economic growth. The results of South Korea show a unidirectional relationship from LGDP （Logarithm of real GDP） and LGDPK （logarithm of real GDP per capita） to military expenditure, and in Malaysia there is unidirectional relationship from LGDPK to military expenditure. The comparison of these results, we can say that developing countries don＇t have meaningful relationship between military expenditure and economic growth, but we can find unidirectional or bidirectional relationship between military expenditure and economic growth in industrial countries.
