Redefining the Nexus of Military Spending Among Southeast Mediterranean Countries in the Presence of Nonlinearities

Palaios, Panagiotis; Papapetrou, Evangelia

doi:10.1080/10242694.2023.2241122

Cited by 2 publications

(1 citation statement)

References 57 publications

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“…The analysis of the defence spending data revealed the existence of possible asymmetric features, as in Palaios and Papapetrou (2023). The latter indicates the need for applying econometric techniques that allow us a more comprehensive description of the conditional distribution than the ordinary mean approach, thus offering a more robust econometric technique methodology in the presence of conditional heterogeneity and departures from the Gaussian conditions.…”

Section: Econometric Methodologymentioning

confidence: 99%

Net spills among NATO allies: Theory and empirical evidence from dynamic quantile connectedness

Palaios,

Triantafillou,

Zombanakis

2023

Security and Defence Quarterly

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The paper draws on the economic theory of alliances to stress the importance of considering both benefits and costs arising from the 0interaction between member states of a military alliance in terms of defence expenditure on equipment. We expand the theory of alliances to incorporate the spills that stem from the obligations of each ally by introducing the notion of spill-outs and net spills, the latter measured as the difference between spill-in and spill-out effects. To assess the net spills contribution of each of the members to the alliance, we test for empirical evidence of net spills among a group of North Atlantic Treaty Organization (NATO) allies, applying time-varying Dynamic Quantile Connectedness analysis. The results that stem from our model considering the cost of spill-outs suggest that there are strong incentives among the allies for free-riding behaviour. In line with our theoretical model, our empirical analysis shows that it is only during crisis period that NATO member-states contribute actively to the alliance, something that has become increasingly clear since the recent Russian invasion of Ukraine.

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Section: Econometric Methodologymentioning

confidence: 99%