To justify the contribution of military expenditure, researchers have been working for under developed, developing, and developed countries.
From the beginning, this kind of studies is more precise for the countries that have achieved their sovereignty from the neighbor countries and the countries who have political consent with other countries (Farzanegan 2014).
Obtained results are robust and passed necessary diagnostic tests significantly.
Over the past decades the study of relationship between military expenditure and GDP growth has received extensive amount of attention of the researchers and policy makers around the world.
To ensure the robustness of the studies we included possible maximum number of observations for each country.
Military Spending Research Paper
The data of GDP growth rate is collected from the World Bank Data; (June 10, 2018) and the data of Military expenditure as a percent of GDP are collected from Stockholm International Peace Research Institute (SIPRI-2018).
So the aim of this study is to justify the relationship between military expenditure and economic growth for three neighbor countries that have to maintain a great amount of military budget as they are geographically correlated with one another.
As military expenditure is an integral part of government expenditure researchers around the world were much curious to investigate the contribution of the military spending in the economy and this curiosity will be continued.
The other group of researchers got negative growth effect of military expenditure through different aspects such as higher budget deficit, higher public debt, higher rate of tax, lower capital formation, investment, and productivity of private sector, lower saving rate, decrease the spending of education, health, research and development. 1984; Lim 1983; Ram 1995; Dunne and Vougas 1999; Gupta et al. 2002) all of the studies obtained the negative growth effect of military expenditure.
Additionally, some other research also concluded that there is no sufficient relationship between military expenditure and economic growth, some of them are (Adams et al. According to them military expenditure does not have any significant impact on the economic growth as the spillover effect being highlighted by the proponents of the military spending is indistinct.