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Strategic Influence in Focus: Assessing the Roles of Defense Expenditures, Foreign Capital, Political Stability, and Energy Sustainability in Geopolitical Dynamics

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  • Muhammad Bahar Khan

    (Department of Pakistan Studies and International Relations, Abbottabad University of Science and Technology, Abbottabad, 22620, Pakistan)

  • Imran Naseem

    (Department of Pakistan Studies and International Relations, Abbottabad University of Science and Technology, Abbottabad, 22620, Pakistan)

  • Ahmad Hamidi

    (Department of Sport Science, Universitas Pendidikan Indonesia, Bandung 40154, Jawa Barat, Indonesia)

  • Mohd Khata Jabor

    (Faculty of Social Sciences and Humanities, Universiti Teknologi Malaysia, Skudai 81310, Johor, Malaysia)

  • Nur Fatihah Abdullah Bandar

    (Faculty of Cognitive Sciences and Human Development, Universiti Malaysia Sarawak, Kota, Samarahan, Sarawak 94300, Malaysia)

  • Khalid Zaman

    (Department of Economics, The University of Haripur, Haripur Khyber Pakhtunkhwa 22620, Pakistan)

Abstract

The study examines Pakistan’s geopolitical relevance by examining its military expenditure, FDI, political stability, energy production, and trade openness. The research utilizes a two-stage least squares (2SLS) regression model for 1996 Q1-2022 Q4 to account for explanatory variable endogeneity for credible estimations. The findings show that military expenditure and political instability lower Pakistan’s geopolitical relevance, as measured by foreign aid. Rising military spending and political upheaval may deter foreign donations due to regional security and resource allocation concerns. Economic resilience and global integration are connected to energy production, trade openness, and geopolitical importance. Therefore, Pakistan needs them to boost its international standing. The analysis also demonstrates that less foreign assistance is connected with higher FDI inflows, which may increase economic independence. These findings, which support the “guns versus butter†paradigm and economic interdependence, may inspire Pakistan’s geopolitical dynamics. This study provides facts on a country’s economic, political, and strategic drivers of geopolitical relevance. These findings may assist Pakistan’s authorities in finding a balance between military and economic measures to boost its global status.

Suggested Citation

  • Muhammad Bahar Khan & Imran Naseem & Ahmad Hamidi & Mohd Khata Jabor & Nur Fatihah Abdullah Bandar & Khalid Zaman, 2024. "Strategic Influence in Focus: Assessing the Roles of Defense Expenditures, Foreign Capital, Political Stability, and Energy Sustainability in Geopolitical Dynamics," International Journal of Energy Economics and Policy, Econjournals, vol. 14(6), pages 476-483, November.
    • Handle: RePEc:eco:journ2:2024-06-46
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    More about this item

    Keywords

    Energy Production; Geopolitical Significance; Military Expenditures; Foreign Direct Investment; Political Stability; Trade Openness;
    All these keywords.

    JEL classification:

    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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