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Does UK defence spending crowd-out UK private sector investment?

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  • James Scott

Abstract

This study tests the hypothesis that defence spending “crowds-out” civil investment. It uses UK data for 1974-96. The results suggest that the crowding-out of investment takes place entirely in the private sector.

Suggested Citation

  • James Scott, 2001. "Does UK defence spending crowd-out UK private sector investment?," Defence and Peace Economics, Taylor & Francis Journals, vol. 12(4), pages 325-336.
    • Handle: RePEc:taf:defpea:v:12:y:2001:i:4:p:325-336
    DOI: 10.1080/10430710108404991
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    References listed on IDEAS

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    1. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
    2. Mintz, Alex & Huang, Chi, 1990. "Defense Expenditures, Economic Growth, and the “Peace Dividend”," American Political Science Review, Cambridge University Press, vol. 84(4), pages 1283-1293, December.
    3. Brada, Josef C. & Jackson, Marvin R., 1978. "The Organization of foreign trade under capitalism and socialism," Journal of Comparative Economics, Elsevier, vol. 2(4), pages 293-320, December.
    4. Smith, Ronald P., 1980. "Military expenditure and investment in OECD countries, 1954-1973," Journal of Comparative Economics, Elsevier, vol. 4(1), pages 19-32, March.
    5. Jacques Fontanel & Ron Smith, 1990. "The impact of strategy and measurement on models of French military expenditure," Post-Print hal-02065551, HAL.
    6. David Gold, 1997. "Evaluating the trade-off between military spending and investment in the United States," Defence and Peace Economics, Taylor & Francis Journals, vol. 8(3), pages 251-266.
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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. 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.
    3. McDonald Bruce D & Eger Robert J, 2010. "The Defense-Growth Relationship: An Economic Investigation into Post-Soviet States," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 16(1), pages 1-28, September.
    4. Hou Na & Chen Bo, 2014. "Military Spending and Economic Growth in An Augmented Solow Model: A Panel Data Investigation for OECD Countries," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(3), pages 395-409, August.
    5. Malizard, Julien, 2015. "Does military expenditure crowd out private investment? A disaggregated perspective for the case of France," Economic Modelling, Elsevier, vol. 46(C), pages 44-52.
    6. 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.
    7. Christos Kollias & Suzanna-Maria Paleologou, 2019. "Military spending, economic growth and investment: a disaggregated analysis by income group," Empirical Economics, Springer, vol. 56(3), pages 935-958, March.
    8. Uk Heo & Robert J. Eger III, 2005. "Paying for Security," Journal of Conflict Resolution, Peace Science Society (International), vol. 49(5), pages 792-817, October.
    9. Jun Ando, 2018. "Externality of Defense Expenditure in the United States: A New Analytical Technique to Overcome Multicollinearity," Defence and Peace Economics, Taylor & Francis Journals, vol. 29(7), pages 794-808, November.

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    Keywords

    Crowding-out; Investment;

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