Asymmetric and Threshold Effect of Military Expenditure on Economic Growth: Insight from an Emerging Market
-
James Temitope Dada
, Akinwumi Sharimakin
, Mamdouh Abdulaziz Saleh Al-Faryan, Mosab I. Tabash
and Adams Adeiza
Abstract
This study aims to investigate the asymmetric effect of military expenditure on economic growth in Nigeria. Furthermore, it determines the threshold level of military expenditure that spurs or hinders economic growth in Nigeria. To achieve the study’s objectives, the nonlinear autoregressive distributed lag (NARDL) and dynamic threshold autoregressive (TAR) techniques are applied as estimation techniques to data from 1981 to 2020. The findings from the study show that (1) positive shocks in military expenditure negatively impact economic growth in the short run, while the effect turns positive in the long run. (2) Negative military expenditure shocks negatively influenced economic growth in Nigeria in both periods. (3) The result from the threshold regression found a threshold value of 0.579 for military expenditure. Based on these findings, policymakers must consider the inherent tendency of asymmetry and nonlinearity in military expenditure when formulating policies related to government spending.

CUSUM of symmetric model.

CUSUMSQ of symmetric model.

CUSUM of asymmetric model.

CUSUMSQ of asymmetric model.

Multiplier of military expenditure.
References
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© 2024 Walter de Gruyter GmbH, Berlin/Boston
Articles in the same Issue
- Frontmatter
- Research Articles
- The Economic Impact of Arms Spending in Germany, Italy, and Spain
- Defense Burden Sharing and Military Cooperation in the EU27: A Descriptive Analysis (2002–2023)
- Is Geopolitical Risk a Reason or Excuse for Bigger Military Expenditures?
- Asymmetric and Threshold Effect of Military Expenditure on Economic Growth: Insight from an Emerging Market
- Letters and Proceedings
- Examining the Military Spending Economic Growth Nexus in the Presence of Informality: Evidence from the Balkan Peninsula
Articles in the same Issue
- Frontmatter
- Research Articles
- The Economic Impact of Arms Spending in Germany, Italy, and Spain
- Defense Burden Sharing and Military Cooperation in the EU27: A Descriptive Analysis (2002–2023)
- Is Geopolitical Risk a Reason or Excuse for Bigger Military Expenditures?
- Asymmetric and Threshold Effect of Military Expenditure on Economic Growth: Insight from an Emerging Market
- Letters and Proceedings
- Examining the Military Spending Economic Growth Nexus in the Presence of Informality: Evidence from the Balkan Peninsula