Research
Economic Determinants Affecting Military Expenditures : Panel Data Analysis
Our research revolves around the topic of considering the military expenditures per capita as a dependent variable and the GDP per capita and CO2 Emissions per capita as two explanatory variables. The study is made up of ten sections addressing several points, each of which clarifies the research method in order to reach a conclusion revealing the importance of the findings. Beginning with the basic statistical characteristics, such as averages, standard deviations, minimums, maximums and the Compound Annual Growth Rate (CAGR), a benefit use of the graph of each variable for each country has been highlighted for a better understanding of the rising and falling during its temporal evolution. The various aspects of the panel analysis have been completed as the questions of individual specific heterogeneity in panel data, the panel unit root tests using the most famous from the first and second generations, and the co-integration analysis according to the Pedroni’s approach, which has led to the rejection of the null hypothesis of no co-integration for each country and for the group as a whole.
Impact of GDP and HDI on Military Expenditures: Survey and Evidence from Dynamic Panel Data Model
This study investigates the impact of Gross Domestic Product (GDP) and Human Development Index (HDI) on the Military Expenditures (ME) in 116 countries in the world. First, a rich descriptive statistical analysis is performed for the global time series associated with the GDP and ME for the 116 countries as well as for all the countries in the world. The ratio of ME to GDP has also been analyzed using descriptive statistics. An in-depth graphical analysis is developed by arranging the 116 countries in increasing order from smallest to largest HDI. We classified these 116 countries into four groups according to the four HDI levels. Second, the optimum orders of the DPD model are selected, where all variables are taken in natural logarithm and using the automatic criteria, AIC, BIC, and HQ. By changing the instruments each time, it has been possible to propose the DPD (2, 0, 2) model in first difference form. Third, dealing with the Arellano-Bond (AB) 1-step and 2-step estimators, a study of the determination of valid instruments and the two GMM steps were presented to make the subject more understandable. Finally, the (AB) estimators have been executed, and the findings reveal an immediate positive impact of GDP on military expenditures, while an indirect HDI effect was observed but delayed for two years.
