<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The issue of security and safety i s a fundamental condition for stable economic trends. Military expenditure can be a very powerful tool for a rapid economic growth. The paper examines the long-run relationship between military expenditure and economic growth in the selected Balkan countries, such as Albania, Bosnia and Herzegovina, Croatia, Montenegro, North Macedonia, Serbia and Slovenia for the period 2004-2018. The analysis implies a panel unit root test, a panel cointegration test, as well as a panel Granger causality test. The results have identified a long-run relationship between military expenditure and economic growth in the Balkan countries based on panel data analysis. Also, empirical findings have confirmed that shock experience in one of the countries’ military expenditure and economic growth have effect on other countries. Finally, the results have determined unidirectional causality from military expenditure to economic growth in these countries and not vice versa.</p>
</abstract>

The issue of security and safety i s a fundamental condition for stable economic trends. Military expenditure can be a very powerful tool for a rapid economic growth. The paper examines the long-run relationship between military expenditure and economic growth in the selected Balkan countries, such as Albania, Bosnia and Herzegovina, Croatia, Montenegro, North Macedonia, Serbia and Slovenia for the period 2004-2018. The analysis implies a panel unit root test, a panel cointegration test, as well as a panel Granger causality test. The results have identified a long-run relationship between military expenditure and economic growth in the Balkan countries based on panel data analysis. Also, empirical findings have confirmed that shock experience in one of the countries’ military expenditure and economic growth have effect on other countries. Finally, the results have determined unidirectional causality from military expenditure to economic growth in these countries and not vice versa.

Panel Cointegration Analysis of Military Expenditure and Economic Growth in the Selected Balkan Countries

Economic Themes

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

The issue of security and safety i s a fundamental condition for stable economic trends. Military expenditure can be a very powerful tool for a rapid economic...

Panel Cointegration Analysis of Military Expenditure and Economic Growth in the Selected Balkan Countries

Published Online: Dec 30, 2021

Page range: 375 - 390

Received: Sep 04, 2020

Accepted: Jul 02, 2021

DOI: https://doi.org/10.2478/ethemes-2021-0021

Keywords
military expenditure, economic growth, Balkan countries, panel cointegration analysis

© 2021 Branimir Kalaš et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Panel Cointegration Analysis of Military Expenditure and Economic Growth in the Selected Balkan Countries

Published Online: Dec 30, 2021

Page range: 375 - 390

Received: Sep 04, 2020

Accepted: Jul 02, 2021

DOI: https://doi.org/10.2478/ethemes-2021-0021

Keywordsmilitary expenditure, economic growth, Balkan countries, panel cointegration analysis

© 2021 Branimir Kalaš et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
military expenditure, economic growth, Balkan countries, panel cointegration analysis