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Dynamics of Public Expenditure on Defense and Economic Growth Pattern in Developed and Developing Countries

Dynamics of Public Expenditure on Defense and Economic Growth Pattern in Developed and Developing Countries

Madhabendra Sinha, Anjan Ray Chaudhury, Partha Pratim Sengupta
Copyright: © 2021 |Pages: 13
ISBN13: 9781799890294|ISBN10: 1799890295|EISBN13: 9781799890300
DOI: 10.4018/978-1-7998-9029-4.ch036
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MLA

Sinha, Madhabendra, et al. "Dynamics of Public Expenditure on Defense and Economic Growth Pattern in Developed and Developing Countries." Research Anthology on Military and Defense Applications, Utilization, Education, and Ethics, edited by Information Resources Management Association, IGI Global, 2021, pp. 669-681. https://doi.org/10.4018/978-1-7998-9029-4.ch036

APA

Sinha, M., Chaudhury, A. R., & Sengupta, P. P. (2021). Dynamics of Public Expenditure on Defense and Economic Growth Pattern in Developed and Developing Countries. In I. Management Association (Ed.), Research Anthology on Military and Defense Applications, Utilization, Education, and Ethics (pp. 669-681). IGI Global. https://doi.org/10.4018/978-1-7998-9029-4.ch036

Chicago

Sinha, Madhabendra, Anjan Ray Chaudhury, and Partha Pratim Sengupta. "Dynamics of Public Expenditure on Defense and Economic Growth Pattern in Developed and Developing Countries." In Research Anthology on Military and Defense Applications, Utilization, Education, and Ethics, edited by Information Resources Management Association, 669-681. Hershey, PA: IGI Global, 2021. https://doi.org/10.4018/978-1-7998-9029-4.ch036

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Abstract

Endogenous growth theories refer that public spending has a considerable bearing on economic growth. Rise in public spending retards rate of economic growth. As the economic structure across the developed and developing countries varies significantly, the effect of public spending on non-productive activities may differ across these countries. In this context, the authors develop a comparative study for looking at the dynamic relationship between public expenditure on defense activities and pattern of economic growth between developing and developed countries across the globe over the period 1960-2015. Using data from SIPRI and World Bank, the authors invoke the panel data regression with panel co-integration test followed by panel VAR. Findings indicate that developed countries have positive impact of defense spending on growth, and the relationship is bi-directional, whereas the impact is found to be negative in developing nations.

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