Spatial Spillover Effects of Terrorism and Militarization on Global Arms Imports

The significant increase in terrorist incidents since 2004 and the resulting insecurity, and also, the continuation of the militarization process over the past decades under the influence of technological advances, have increased the arms import in the world. Terrorism by creating insecurity in neighboring countries and militarization under geopolitical competition can increase the arms import in neighboring countries and lead to a double growth of global arms imports. Based on this, the main purpose of this study is to investigate the direct effects of terrorism and militarization on the global arms import and its spillover effects to neighboring countries using statistical data from 67 countries in the period of 2004-2019. For this purpose, an arms import demand model with the presence of indicators of terrorism and global militarization for the countries under study and the spatial econometric method has been used to estimate it. The results of the model estimation show that the occurrence of terrorist incidents and militarization had a positive and significant effect on the arms import. Also, the global arms imports have spatial effects and the arms import is also affected by neighboring countries. The existence of spillover effects of terrorism and militarization on global arms imports is also confirmed. In this sense, the occurrence of terrorist incidents and militarization in a country, in addition to having a positive effect on the arms import of that country, also increases the arms import of the neighboring country.