A panel data analysis of the military expenditure-external debt nexus : evidence from six middle eastern countries

Smyth, Russell and Narayan, Paresh 2009, A panel data analysis of the military expenditure-external debt nexus : evidence from six middle eastern countries, Journal of peace research, vol. 46, no. 2, pp. 235-250.

Attached Files
Name Description MIMEType Size Downloads

Title A panel data analysis of the military expenditure-external debt nexus : evidence from six middle eastern countries
Author(s) Smyth, Russell
Narayan, Paresh
Journal name Journal of peace research
Volume number 46
Issue number 2
Start page 235
End page 250
Publisher Sage Publications Ltd.
Place of publication London, England
Publication date 2009
ISSN 0022-3433
1460-3578
Summary While a number of studies examine the nexus between military expenditure and economic growth, little consideration has been give to the effect of military expenditure on external debt. This article examines the impact of military expenditure and income on external debt for a panel of six Middle Eastern countries - Oman, Syria, Yemen, Bahrain, Iran, and Jordan - over the period 1988 to 2002. The Middle East represents an interesting study of the effect of military expenditure on external debt because it has one of the highest rates of arms imports in the world and it is one of the most indebted regions in the world. The study first establishes whether there is a long-run relationship between military expenditure, income, and external debt in the six countries using a panel unit root and panel cointegration framework and then proceeds to estimate the long-run and short-run effects of military expenditure and income on external debt. The study finds that external debt is elastic with respect to military expenditure in the long run and inelastic with respect to military expenditure in the short run. For the panel of six Middle Eastern countries, in the long run a 1% increase in military expenditure results in between a 1.1 % and 1.6% increase in external debt, while a 1% increase in income reduces external debt by between 0.6% and 0.8%, depending on the specific estimator employed. In the short run, a 1% increase in military expenditure increases external debt by 0.2%, while the effect of income on external debt is statistically insignificant.
Language eng
Field of Research 160604 Defence Studies
Socio Economic Objective 810199 Defence not elsewhere classified
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2009, The Authors
Persistent URL http://hdl.handle.net/10536/DRO/DU:30022692

Document type: Journal Article
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
Connect to link resolver
 
Unless expressly stated otherwise, the copyright for items in DRO is owned by the author, with all rights reserved.

Versions
Version Filter Type
Citation counts: TR Web of Science Citation Count  Cited 9 times in TR Web of Science
Scopus Citation Count Cited 9 times in Scopus
Google Scholar Search Google Scholar
Access Statistics: 466 Abstract Views, 2 File Downloads  -  Detailed Statistics
Created: Thu, 21 Jan 2010, 15:54:04 EST by Katrina Fleming

Every reasonable effort has been made to ensure that permission has been obtained for items included in DRO. If you believe that your rights have been infringed by this repository, please contact drosupport@deakin.edu.au.