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Influence of Military Expenditures, Industrial Growth, and Financial Development on Economic Growth, and Environment in Heterogeneous Political Regimes in Pakistan

Author

Listed:
  • Faqeer Muhammad

    (Karakoram International University
    Karakoram International University)

  • Anwar Khan

    (Southwestern University of Finance and Economics)

  • Jamal Hussain

    (Karakoram International University
    Southwestern University of Finance and Economics)

  • Tasawar Baig

    (Karakoram International University)

  • Saadia Baig

    (Karakoram International University)

Abstract

This study attempted to measure military expenditures, industrial growth, and financial development on economic growth and environmental degradation in two heterogeneous political regimes, i.e., democracy and autocracy in Pakistan, over 1971–2014. For this purpose, we have adopted a bound cointegration approach that can account for structural breaks (Gregory and Hansen), the autoregressive distributed lags (ARDL) model, and the spectral Granger causality approach of Breitung and Candelon to conclude the study with rigorous outcomes. Our results concluded that the chosen variables are cointegrated for the long run in the existence of structural breaks. Similarly, the short-run effects have shown that military expenditures are escalating the environmental emissions and economic growth. On the other hand, the influence of finance is positive and significantly contributing to environmental emissions. While in the long-run, the results revealed that democratic governments are more concerned about environmental quality as the relationship with environmental degradation based on CO2 emissions (E) is negative. However, the dictatorship regime has a positive and significant influence on environmental degradation in Pakistan. To overcome the adverse effects of the growth, the research findings suggest adopting environmentally friendly policies in Pakistan.

Suggested Citation

  • Faqeer Muhammad & Anwar Khan & Jamal Hussain & Tasawar Baig & Saadia Baig, 2024. "Influence of Military Expenditures, Industrial Growth, and Financial Development on Economic Growth, and Environment in Heterogeneous Political Regimes in Pakistan," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 2439-2459, March.
    • Handle: RePEc:spr:jknowl:v:15:y:2024:i:1:d:10.1007_s13132-023-01261-5
    DOI: 10.1007/s13132-023-01261-5
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