Defence partnerships, military expenditure, investment, and economic growth: an analysis in PESCO countries

Karamanis, Dimitris (2022) Defence partnerships, military expenditure, investment, and economic growth: an analysis in PESCO countries. Hellenic Observatory Discussion Papers (173). London School of Economics and Political Science, London, UK.

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Abstract

This paper employs a panel vector autoregressive (PVAR) approach to investigate the relationship among military expenditure, investment, and economic growth, over the period after the enforcement of the Maastricht treaty (1994–2018) in 25 European countries that participate in the Permanent Structured Cooperation (PESCO). By using the Louvain community detection algorithm on the network links that have been established through defence partnerships in PESCO projects, two different country clusters emerge. Findings suggest that military expenditures can stimulate economic growth but the effects may not be common for all Member States, which might benefit from the involvement in joint defence projects to maximize the effectiveness of their defence spending.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://www.lse.ac.uk/hellenic-observatory/publica...
Additional Information:	© 2022 The Author
Divisions:	Hellenic Observatory
Subjects:	J Political Science > JZ International relations J Political Science > JN Political institutions (Europe) H Social Sciences > HC Economic History and Conditions
JEL classification:	H - Public Economics > H5 - National Government Expenditures and Related Policies > H56 - National Security and War C - Mathematical and Quantitative Methods > C3 - Econometric Methods: Multiple; Simultaneous Equation Models; Multiple Variables; Endogenous Regressors > C33 - Models with Panel Data O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output (Income) Convergence
Date Deposited:	05 Jul 2022 08:06
Last Modified:	21 Sep 2025 01:31
URI:	http://eprintstest.lse.ac.uk/id/eprint/115485

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