Impact of Military Expenditures on the Globalization Process: A Spatial Econometric Analysis for African Region

Abstract

With modernization, ideological shifts and economic interdependency, the concept of globalization has expanded vastly. Though the world is unipolar, still the international competition remains prevalent that poses serious threats to regional conflicts. The great powers of the world are still competing with each other for influence over other countries. Thus, the role of militarization cannot be ignored in this context. Thus, it would be interesting to examine the impact of military expenditures on the globalization process through the spill-over effects, along with their relationship with economic growth. The study employed panel data consisting of African countries, covering the time period from 2001 to 2014. The econometric estimation is done through the application of spatial econometric techniques, that is, the spatial autoregressive fixed effect model and spatial Durbin fixed effect model. The study has found a positive relationship between economic growth and globalization but a negative relationship was found between military expenditures and economic growth.