ISSN 1027-0353
African Journal of Political Science ISSN 3461-2165 Vol. 6 (12), pp. 001-011, December, 2012. © International Scholars Journals
Full Length Research
Modelling the nexus between defense spending and economic growth in asean- 5: Evidence from cointegrated panel analysis
Rudra P. Pradhan
Assistant Professor, Vinod Gupta School of Management, Indian Institute of Technology Kharagpur, India. Email: [email protected].
Accepted 15 August, 2012
Abstract
The paper explores the nexus between defense spending and economic growth in the five ASEAN countries namely, namely Indonesia, Malaysia, Philippines, Singapore and Thailand over the period 1988 - 2007. The empirical analysis is based on cointegration and causality test at the individual level and panel level. The findings suggest the presence of unidirectional causality from economic growth to defense spending in Indonesia, Malaysia, Singapore and Thailand. It also finds the feedback between defense spending and economic growth in Philippines at the individual level and at the panel of ASEAN-5. The implication of this research is that neither economic growth nor defense spending can be considered as exogenously determined.
Key words: Economic growth, defense spending, panel cointegration.