Journals / Çukurova Üniversitesi Sosyal Bilimler Enstitüsü Dergisi / 2026 / Cilt: 30 Sayı: 2

THE RELATIONSHIP BETWEEN DEFENSE EXPENDITURES AND ECONOMIC GROWTH: A STUDY ON OECD COUNTRIES

SAVUNMA HARCAMALARI EKONOMİK BÜYÜME İLİŞKİSİ: OECD ÜLKELERİ ÜZERİNE BİR İNCELEME

Özkan Zülfüoğlu(MARMARA ÜNİVERSİTESİ)0000-0002-0305-1685
Pages
139–153
Publication Date
2021-10-31
🏛️Bibliographic metadata and full text access for this article are provided via DergiPark.
DergiPark Record ↗
✨

AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

It is thought that the differences in the development levels of the countries, arms imports and the connections of the defense industry with other sectors may be effective on growth.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:Defense spending is born out of necessity.
📊
Key Findings & Data:In the study, using the data of 35 OECD countries between 2005 and 2019, the effect of defense expenditures on economic growth through the causality relationship with GDP was examined with the help of panel data causality analysis.
💡
Conclusion & Impact:It is thought that the differences in the development levels of the countries, arms imports and the connections of the defense industry with other sectors may be effective on growth.
🔬Design:Araştırma Makalesi
📍Scope:2005 Verileri
⚙️Variables:Savunma Harcamaları · Ekonomik Büyüme · Panel Veri Nedensellik Analizi

Abstract

Defense spending is born out of necessity. The amount and composition of defense expenditures differ according to the geographical locations and political perspectives of the countries. However, the effect of defense expenditures on growth has been a subject that has been extensively researched. In this study, first of all, the effects of defense expenditures on the defense industry and possible growth channels are discussed. With the aim of establishing a national independent defense industry, states can give incentives to these areas. Behind these incentives lies the reduction of military economic dependence, as well as supporting the private sector and stimulating economic growth.. In the study, using the data of 35 OECD countries between 2005 and 2019, the effect of defense expenditures on economic growth through the causality relationship with GDP was examined with the help of panel data causality analysis. The results of the analysis showed that defense expenditures will adversely affect economic growth in the long run. However, it should be noted that the results reflect a general situation. It is thought that the differences in the development levels of the countries, arms imports and the connections of the defense industry with other sectors may be effective on growth.

Özet

Savunma harcamaları zorunluluktan doğmakta, ülkelerin coğrafi konumları ile politik bakış açılarına göre miktar ve bileşimi farklılık göstermektedir. Bu özelliklerinin yanında, savunma harcamalarının ekonomik büyüme üzerindeki etkisi, iktisat ve maliye literatüründe fazlasıyla araştırılan bir konu olmuştur. Bu çalışmada, öncelikle savunma harcamalarının savunma sanayii üzerinden doğurabileceği ekonomik sonuçlar ve ekonomik büyüme üzerindeki etki kanalları tartışılmıştır. Bilindiği üzere siyasi iktidarlar, ulusal bağımsız bir savunma sanayii kurulması hedefiyle savunma sanayii teşviklerine başvurabilmektedirler. Bu teşviklerin arkasında savunma sanayiinde dışa bağımlılığı azaltmanın yanında, özel sektörü desteklemek ile ekonomik büyümenin uyarılması da yatmaktadır. Çalışmada 35 OECD ülkesinin 2005-2019 yılları arasındaki verisi kullanılarak, savunma harcamalarının GSYH ile olan nedensellik ilişkisi üzerinden, ekonomik büyümeye olan etkisi panel veri nedensellik analizi yardımıyla incelenmiştir. Analiz sonuçları, uzun dönemde savunma harcamalarının ekonomik büyümeyi olumsuz etkileyebileceğini göstermiştir. Bununla birlikte sonuçların genel bir durumu yansıttığı, ülkelerin gelişmişlik düzeyleri, silah ithalat ve ihracat durumları ile savunma sanayiinin diğer sektörlerle bağlantılarının büyüme üzerinde etkili olabileceği düşünülmektedir.

🔖

Cite This Article

Zülfüoğlu, Ö. (2021). THE RELATIONSHIP BETWEEN DEFENSE EXPENDITURES AND ECONOMIC GROWTH: A STUDY ON OECD COUNTRIES. Çukurova Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, Cilt: 30 Sayı: 2, 139–153. https://doi.org/10.35379/cusosbil.905022

📄 Full Text PDF Viewer

📄

PDF görüntüleyici hazırlanıyor...

References (51)

  1. Abu-Bader S. & Abu-Qarn, A. (2003). Government expenditures, military spending and economic rrowth: causality evidence from Egypt, Israel and Syria. MPRA Paper No. 1115. https://mpra.ub.uni-muenchen.de/1115/1/MPRA_paper_1115.pdf
  2. Afonso, A. & Aubyn, M. St. (2008). Macroeconomic rates of return of public and private investment crowding-in and crowding-out effects. Working Paper Series, NO 864. https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp864.pdf
  3. Ağır, H., Kar, M., & Nazlıoglu, Ş. (2011). Do remittances matter for financial development in the MENA region? Panel cointegration and causality analysis. Empirical Economics Letters, 10(5), 449-456. https://doi.org/10.1016/j.econmod.2010.05.015
  4. Alexander W. (1990). The impact of defense spending on economic growth. Defence Economics, 2(1), 39-55. https://doi.org/10.1080/10430719008404677 Anwar, MA, Rafique, Z., & Joiya, SA (2012). Defense spending economic growth nexus: A case study of Pakistan. Pakistan Economic and Social Review, 163-182. https://www.jstor.org/stable/43855779
  5. Bahal, G., Raissi, M., & Tulin, V. (2018). Crowding-Out or Crowding-In? Public and private investment in India. World Development, 109, 323-333. https://doi.org/10.1016/j.worlddev.2018.05.004
  6. Benoit, E. (1973). Defense and Economic Growth in Developing Countries. Lexington Books.
  7. Benoit, E. (1978). Growth and defense in developing countries. Economic Development and Cultural Change, 26(2), 271-80. http://dx.doi.org/10.1086/451015
  8. Bozkurt, İ. & Karakuş, R. (2017). Finansal içerme-Ekonomik gelişmişlik ilişkisi: Dünya geneli için ampirik bir inceleme. Üçüncü Sektör Sosyal Ekonomi Dergisi, 55(3), 1504-1523. https://doi.org/10.15659/3.sektor-sosyal-ekonomi.20.06.1357
  9. Cappelen Å., Gleditsch NP, & Bjerkholt O. (1984). Military spending and economic growth in the OECD countries. Journal of Peace Research, 21(4), 361-373. https://doi.org/10.1177/002234338402100404
  10. Chang, T., Fang, W., Wen, LF, & Liu, C. (2001). Defence spending, economic growth and temporal causality: evidence from Taiwan and Mainland China, 1952-1995. Applied Economics, 33(10), 1289-1299.
  11. d’Agostino G., Dunne JP, & Pieroni L (2018). Military expenditure, endogeneity and economic growth. Defence and Peace Economics, 30(5), 509-524. https://doi.org/10.1080/10242694.2017.1422314
  12. De Grasse Jr., RW (1993). Military Expansion Economic Decline: the Impact of MilitarySpending on U.S. Economic Performance, M.E. Sharpe, Armonk.
  13. Deger, S. Sen, S. (1983). Military expenditure, spin-off and economic development. Journal of Development Economics, 13, 67-83. https://doi.org/10.1016/0304-3878(83)90050-0
  14. Desli, E. & Gkoulgkoutsika, A. (2021). Military spending and economic growth: A panel data investigation. Economic Change and Restructuring, 54, 781-806. https://doi.org/10.1007/s10644-020-09267-8
  15. Desli, E., Gkoulgkoutsika, A., & Katrakilidis, C. (2017). Investigating the dynamic interaction between military spending and economic growth. Review of Development Economics, 21(3), 511-526. https://doi.org/10.1111/rode.1226
  16. Devore, MR (2014). Defying convergence: Globalisation and varieties of defence-industrial capitalism. New Political Economy, 20(4), 569–593. https://doi.org/10.1080/13563467.2014.951612
  17. European Commission (2009). Defence Industry, Comprehensive sectoral analysis of emerging competences and economic activities in the European Union. https://ec.europa.eu/social/BlobServlet?docId=4187&langId=en
  18. Erden, L. & Holcombe, RG (2006). The linkage between public and private investment: A co-integration analysis of a panel of developing countries. Eastern Economic Journal, 32(3), 479-492. https://www.jstor.org/stable/40326291
  19. Faini R., Annez P. & Taylor L. (1984). Defense spending, economic structure, and growth: evidence among countries and over time. Economic Development and Culturel Change, 32(3), 487-498. https://www.jstor.org/stable/1153333
  20. Frederiksen, PC & Looney, RE (1983). Defense expenditures and economic growth in developing countries. Armed Forces & Society, 9(4), 633-645. https://doi.org/10.1177/0095327X8300900406
  21. Friedman, BM (1978). Crowding Out or Crowding In? Economic consequences of financing government deficits. Brookings Papers on Economic Activity, 9(3), 593-641. https://www.brookings.edu/wp-content/uploads/2016/11/1978c_bpea_friedman.pdf
  22. Gökmenoğlu, KK, Taşpınar, N., & Sadeghieh, M. (2015). Military expenditure and economic growth: The case of Turkey. Procedia Economics and Finance, 25, 455-462. https://doi.org/10.1016/S2212-5671(15)00757-1
  23. Hadri, K. (2000). Testing for stationarity in heterogeneous panel data. The Econometrics Journal, 3(2), 148-161. https://doi.org/10.1111/1368-423X.00043
  24. Hadri, K. & Kurozumi, E. (2012). A simple panel stationarity test in the presence of serial correlation and a common factor. Economics Letter, 115, 31-34. https://doi.org/10.1016/j.econlet.2011.11.036
  25. Halıcıoğlu, F. (2007). Defense spending and economic growth in Turkey: An empirical application of new macroeconomic theory. Review of Middle East Economics and Finance, 2(3), 193-201. https://doi.org/10.2202/1475-3693.1028
  26. Hatemi-J, A., Chang, T., Chen, WY, Lin, FL, & Gupta, R. (2018). Asymmetric causality between military expenditures and economic growth in top six defense spenders. Quality & Quantity, 52(3), 1193-1207. https://doi.org/10.1007/s11135-017-0512-9
  27. Heo, U. (2010). The relationship between defense spending and economic growth in the United States. Political Research Quarterly, 63(4), 760–770. http://www.jstor.org/stable/25749247
  28. Karagöl, E. & Palaz, S. (2004). Does defence expenditure deter economic growth in Turkey? A cointegration analysis. Defence and Peace Economics, 15(3), 289–298. https://doi.org/10.1080/10242690320001608908
  29. Karakaya, C. & Şahinoğlu, T. (2020). Savunma harcamaları ve ekonomik büyüme ilişkisi: Türkiye örneği. Business and Economics Research Journal, 11(2), 335-351. https://doi.org/10.20409/berj.2020.253
  30. Korkmaz, S. (2015). The effect of military spending on economic growth and unemployment in mediterranean countries. International Journal of Economics and Financial Issues, 5(1), 273-280.
  31. Landau, D. (2007). The impact of military expenditures on economic growth in the less developed countries. Defence and Peace Economics, 5(3), 205-220. https://doi.org/10.1080/10430719408404793
  32. Lee, C-C. Chen, S-T. (2007). Do defense expenditures spur GDP? A panel analysis from OECD and non-OECD countries. Defence and Peace Economics, 18(3), 265-280. https://doi.org/10.1080/10242690500452706
  33. Leontief W & Duchin, F. (1983). Military Spending: Facts and Figures, Worldwide Implications and Future Outlook. Oxford University Press.
  34. Lim, D. (1983). Another look at growth and defense in less developed countries. Economic Development and Cultural Change, 31(2), 377-84. http://www.jstor.org/stable/1153485
  35. Melman, S. (1974). The Permanent War Economy: American Capitalism in Decline. Simon and Schuster.
  36. Moretti E., Steinwender C. & Reenen JV (2016), The intellectual spoils of war? Defence R&D, productivity and spillovers. https://eml.berkeley.edu/~moretti/military.pdf
  37. OECD (2020). Gross Domestic Product (GDP) Database. https://data.oecd.org/gdp/gross-domestic-product-gdp.htm
  38. Ortiz C., Alvarado R., & Salinas A. (2019). The effect of military spending on output: New evidence at the global and country group levels using panel data cointegration techniques. Economic Analysis Policy, 62, 402-414. https://doi.org/10.1016/j.eap.2018.10.004
  39. Pavitt, K. (1984). Sectoral patterns of technical change: Towards a taxonomy and a theory. Research Policy, 13(6), 343-373. https://doi.org/10.1016/0048-7333(84)90018-0
  40. Peseran, MH (2004). General diagnostic tests for cross section dependence in panels. IZA Discussion Paper, 1240. https://ftp.iza.org/dp1240.pdf
  41. Pesaran, MH (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of Applied Econometrics, 22(2), 265-312. https://doi.org/10.1002/jae.951
  42. Rasmussen, PN (1956). Studies in Intersectoral Relations. North-Holland.
  43. Rothschild, KW (1973). Military expenditure, exports and growth. Kyklos, 26(4), 804-13. https://doi.org/10.1111/j.1467-6435.1973.tb02777.x
  44. Saba, CS & Ngepah, N. (2019). Military expenditure and economic growth: Evidence from a heterogeneous panel of african countries. Economic Research-Ekonomska Istraživanja, 32(1), 3586-3606. https://doi.org/10.1080/1331677X.2019.1674179
  45. SIPRI (2020). Military Expenditure Database. https://www.sipri.org/databases/milex
  46. Tatoğlu, FY (2018). Panel Zaman Serileri Analizi. Beta Yayınları.
  47. T.C Cumhurbaşkanlığı Savunma Sanayii Başkanlığı (2021), Savunma Sanayiimiz Tarihçe. https://www.ssb.gov.tr/WebSite/contentlist.aspx?PageID=47&LangID=1
  48. Temursho, U. (2016), Backward and Forward Linkages and Key Sectors in the Kazakhistan Economy. https://www.adb.org/sites/default/files/project-documents/47110/47110-001-dpta-en_2.pdf
  49. Wang, T-P., Shyu, S. H-P., Chou, H-C. (2012). The impact of defense expenditure on economic productivity in OECD countries. Economic Modelling, 29(6), 2104-2114. https://doi.org/10.1016/j.econmod.2012.06.041
  50. Westerlund, J. (2007). Testing for error correction in panel data. Oxford Bulletin of Economics and Statistics, 69(6), 709-748. https://doi.org/10.1111/j.1468-0084.2007.00477.x
  51. Yıldırım, J., Sezgin S., & Ocal, N. (2005). Military expenditure and economic growth in middle eastern countries: A dynamic panel data analysis. Defence and Peace Economics, 16(4), 283–295. https://doi.org/10.1080/10242690500114751