Economists recognize that the public expenditure has an impact on economic growth. The rising level of military spending over other classes of public expenditure like economic and social services has raised a serious concern among scholars and have been at the core of recent development literature and thinking. In this study, we focus on to reexamine the effects of military spending on economic growth in India using annual data from the period of 1980 to 2011. The analysis is carried out within a multivariate setting that includes real GDP, real government military expenditure, population and real export.. In this paper, the autoregressive distributive lags (ARDL) cointegration approach is used to reexamine the long-run relationships among the variables. We then employ the Granger causality test to identify the direction of causality. The results for ARDL tests indicate that there is a significant relationship between military expenditure and economic growth in the short run, while the long run results suggest otherwise. While the estimated granger causality outcomes, revealed a unidirectional relationship between GDP and military spending.

This paper provides an empirical analysis of the relationship between economic growth and its determinants with special focus on gross fixed capital formation, export, import, and financial development for the Kingdom of Saudi Arabia (KSA). Therefore, the study utilized an annual data from 1980 till 2014, and employed both the autoregressive distributed lag model (ARDL) and the error correction method (ECM) to investigate the long-run and the short-run parameters between the variables. The findings suggest a positive relationship between fixed capital formation, export, in one hand and economic growth in the other hand, both in the short-run and the long-run. In contrast, the financial development variable found to have a negative effect on economic growth in the short-run, however, it turned out to be positive in the long-run. Finally, the import variable showed a negative contribution to growth in the long-run as well as in the short-run. The results are consistent with the theoretical and empirical predictions.

Abstract

In this paper, we have investigated the relationship between trade openness and long-run economic growth over the sample period 1960–2015, utilizing ARDL model. We found evidence that trade openness is directly correlated with economic growth in the long run. Furthermore, Granger Causality tests recommended that a change in trade openness impacts the long-run of economic growth through the interaction with gross capital formation in the case of China.