Economic Growth, US Aid or China's increasing Military expenditure? A Data Analysis of factors affecting Military Expenditure in ASEAN Nations embroiled in Territorial Conflicts with China

Abstract

Over the past decade and prior, the Philippines, Vietnam, Malaysia, Indonesia and Brunei, all of whom are members of ASEAN (Association of South East Asian Nations), have been engaged in territorial disputes with China, particularly in regard to the South China Sea. Hence, in this paper, we perform a Data Analysis of how changes to US military aid to these countries, Economic growth in these states as well as pressure from China’s increasing Military Budget has affected changes towards Military Spending in these nations. We start off by performing a data analysis of these individual factors. Following so, we perform a multiple linear regression model to determine which factors prove the most significant, if any, towards changes in military spending in these countries. Our results show that based off data from 2008 to 2018, from a Statistical Multiple Linear Regression analysis, we could conclude that Individual Economic Growth is the most significant factor in affecting changes towards Vietnam’s military expenditure, while pressure resulting from China’s increasing Military Expenditure is the most significant factor in affecting changes towards Malaysia’s military expenditure. Additionally, at significance level α = 0.1, Indonesia’s individual economic growth is the most significant factor in affecting changes towards its military expenditure. However, at α = 0.1, we are inconclusive in determining any significant factor affecting changes towards Brunei and Philippine’s military expenditure.