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Military Expenditure and Investment in OECD Countries: Revisited

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  • Hou Na

    (Center for Fiscal Development Research and Institute of Defence Economics and Management, Central University of Finance and Economics, Beijing 100081, China)

  • Chen Bo

    (Center for Fiscal Development Research and Institute of Defence Economics and Management, Central University of Finance and Economics, Beijing 100081, China)

Abstract

This study examines the effects of military expenditure on investment in 13 selected OECD countries over the period of 1971–2012 by applying the Smith Demand-Side model and different estimation methodologies including panel data, cross section and time series estimation methods. Our empirical results reveal that military expenditure crowds out investment and that crowding-out effect lessens during the Post-Cold War period.

Suggested Citation

  • Hou Na & Chen Bo, 2014. "Military Expenditure and Investment in OECD Countries: Revisited," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(4), pages 621-630, December.
    • Handle: RePEc:bpj:pepspp:v:20:y:2014:i:4:p:10:n:6
    DOI: 10.1515/peps-2014-0031
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    References listed on IDEAS

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    Cited by:

    1. Gülbahar ÜÇLER, 2016. "Testing the relationship between military spending and private investments: Evidence from Turkey," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 307-318, Autumn.
    2. Paula Gomez-Trueba & Alfredo Arahuetes & Aurora García Domonte & Tomas Curto, 2020. "The Relationship Between Expenditure on Defence and Economic Growth in Spain," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 393-406.
    3. Gülbahar ÜÇLER, 2016. "Testing the relationship between military spending and private investments: Evidence from Turkey," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(608), A), pages 307-318, Autumn.

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