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Defense spending and economic growth: evidence from China, 1952–2012

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  • Mie Augier
  • Robert McNab
  • Jerry Guo
  • Phillip Karber

Abstract

This paper examines whether defense expenditures contributed to economic growth in China for the 1952–2012 period. We examine the contribution of defense to economic growth using recently published official data on economic activity, defense, and government expenditures. We employ the Feder-Ram and augmented Solow models of economic growth to explore the defense-growth relationship. The Feder-Ram model appears to poorly explain economic growth in China. The augmented Solow model suggests, however, that a 1% increase in defense expenditures raises the economic growth rate by approximately 0.15–0.19%.

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  • Mie Augier & Robert McNab & Jerry Guo & Phillip Karber, 2017. "Defense spending and economic growth: evidence from China, 1952–2012," Defence and Peace Economics, Taylor & Francis Journals, vol. 28(1), pages 65-90, January.
    • Handle: RePEc:taf:defpea:v:28:y:2017:i:1:p:65-90
    DOI: 10.1080/10242694.2015.1099204
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    3. Chiwei Su & Yingying Xu & Hsu Ling Chang & Oana-Ramona Lobont & Zhixin Liu, 2020. "Dynamic Causalities between Defense Expenditure and Economic Growth in China: Evidence from Rolling Granger Causality Test," Defence and Peace Economics, Taylor & Francis Journals, vol. 31(5), pages 565-582, July.
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    6. Shafa Guliyeva, 2024. "Analyzing the Interplay between Energy Consumption and Military Expenditure: A Comparative Study of Azerbaijan, Turkey, and Pakistan," International Journal of Energy Economics and Policy, Econjournals, vol. 14(1), pages 533-543, January.
    7. Aamer S. Abu-Qarn, 2019. "Reassessment of the Proximate Determinants of Income Levels and Growth of Nations," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 47(4), pages 463-483, December.
    8. Yingying Xu & Hsu Ling Chang & Chi Wei Su & Adelina Dumitrescu, 2018. "Guns for Butter? Empirical Evidence from China," Defence and Peace Economics, Taylor & Francis Journals, vol. 29(7), pages 809-820, November.
    9. Dada James Temitope & Awoleye Emmanuel Olayemi & Arnaut Marina & Al-Faryan Mamdouh Abdulaziz Saleh, 2023. "Revisiting the Military Expenditure-Growth Nexus: Does Institutional Quality Moderate the Effect?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 29(1), pages 19-42, February.

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