Should Portuguese economy invest in defense spending? A revisit

Muhammad Shahbaz, Nuno Leitão, Gazi Salah Uddin, Mohamed Arouri and Frédéric Teulon

Economic Modelling, 2013, vol. 35, issue C, 805-815

Abstract: In this paper, we investigate the causal relationship between defense spending and economic growth in Portugal during the period of 1980–2010. We apply the ARDL bounds testing approach in the presence of structural break. The ARDL–ECM estimation results disclose that the relations between defense spending, capital, labor and economic growth are country specific. The interesting finding of this study is that there is a U-shaped relationship that exists between defense spending and economic growth. In addition, the unidirectional causality from defense spending to economic growth exists in the case of Portugal. Therefore, defense spending can play an important role in economic development of Portugal.

Keywords: Defense spending; Economic growth; Cointegration; Causality; Portugal (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999313003544
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Should Portuguese Economy Invest in Defense Spending? A Revisit (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:35:y:2013:i:c:p:805-815

DOI: 10.1016/j.econmod.2013.08.038

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().