Military spending, economic growth and endogeneity a panel analysis 1988-2010
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University of Cape Town
This paper examines the impact of military expenditure on economic growth on a large balanced panel, using an exogenous growth model and dynamic panel data methods for 104 countries over the period 1988-2010. The prime objective of the paper is to consider the possibility of non-linearity, group heterogeneity and endogeneity within the sample. Having estimated and appraised a full sample, it is stratified based upon a range of potentially relevant factors; different levels of income, conflict experience, natural resource abundance, openness and aid. Following the stratification process, a set of instrumental variables are taken for military spending. Using 2SLS and a dynamic Generalized Method of Moments (GMM) method, the sample is regressed to identify for military expenditure.
Includes bibliographical references.
Tian, N. 2013. Military spending, economic growth and endogeneity a panel analysis 1988-2010. University of Cape Town.