Abstract
ABSTRACT Geopolitical risk and rising military expenditure may have severe consequences for economic output. Thus, this study analyzes the causal nexus between defence expenditure and total factor productivity in the highest defence-spender countries during 1994-2022, employing panel bootstrap Granger causality. The findings suggest that total factor productivity has a significant effect on defence expenditure in China, Germany, Russia, and the UK. Similarly, the results reveal the existence of causality running from defence expenditure to total factor productivity in China, India, Japan, and Russia. Likewise, the results indicate no causal relationships in France, South Korea, and the US implies the presence of other factors for defence expenditure and total factor productivity. The policy recommends a balanced approach to defense expenditure reductions: prioritizing essential capabilities and redirecting savings to investments in productivity.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callSimilar Papers
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
