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Does higher military spending affect business regulatory and growth specific measures? Evidence from the group of seven (G-7) countries

  • Haroon Ur Rashid Khan
  • Khalid Zaman
  • Talat Islam
  • Sheikh Usman Yousaf
  • Abdelmohsen A. Nassani
  • Aqeel Khan
  • Mohamed Sharif Mustaffa
  • Jamilah Ahmad
  • Sanil S. Hishan
  • Alamzeb Aamir
Article
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Abstract

The effects of military spending mostly viewed with the growth specific factors while its effect on business regulatory measures mostly unobserved in the previous literature which has been evaluated in this study for robust inferences. The results confirmed the (i) Keynesian defense burden hypothesis, (ii) supply side spillovers and aggregate demand hypothesis, and (iii) non-linear hypothesis by using different military factors including armed forces personnel, arms exports, arms imports, and military expenditures in relation with the business disclosure index, cost of doing business, insurance and financial services, per capita income, inbound FDI, business growth factors, and trade openness. The bidirectional causality found between (i) income growth and military factors, and (ii) military growth and business factors, while it further validates the (i) business led military expenditures, (ii) income led military expenditures, and (iii) military led trade openness in a panel of G-7 countries.

Keywords

Military expenditures Business regulatory measures Growth specific factors Robust least squares regression G-7 countries 

JEL Classification

C33 E12 F40 
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Copyright information

© Springer Nature Switzerland AG 2018

Authors and Affiliations

  • Haroon Ur Rashid Khan
    • 1
    • 2
  • Khalid Zaman
    • 3
  • Talat Islam
    • 4
  • Sheikh Usman Yousaf
    • 5
  • Abdelmohsen A. Nassani
    • 6
  • Aqeel Khan
    • 7
  • Mohamed Sharif Mustaffa
    • 8
  • Jamilah Ahmad
    • 7
  • Sanil S. Hishan
    • 9
  • Alamzeb Aamir
    • 10
  1. 1.School of Finance, College of Business and Public ManagementKean UniversityUnionUSA
  2. 2.Wenzhou-Kean University CampusWenzhouPeople’s Republic of China
  3. 3.Department of EconomicsUniversity of WahWah CantonmentPakistan
  4. 4.Institute of Business AdministrationUniversity of the PunjabLahorePakistan
  5. 5.Hailey College of Banking and FinanceUniversity of the PunjabLahorePakistan
  6. 6.Department of Management, College of Business AdministrationKing Saud UniversityRiyadhSaudi Arabia
  7. 7.Faculty of EducationUniversiti Teknologi MalaysiaJohor BahruMalaysia
  8. 8.Faculty of Cognitive Sciences and Human DevelopmentUniversiti Malaysia SarawakSarawakMalaysia
  9. 9.Faculty of ManagementUniversiti Teknologi MalaysiaJohor BahruMalaysia
  10. 10.Department of Management SciencesFATA UniversityFR KohatPakistan

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