Analysis of the performance of military expenditures in encounter with crime and transnational forces of terrorism in MENA countries :using spatial panel regression approach

Transnational terrorism is a form of terrorism which attempts to influence more than one country through various possible connections. Few empirical studies conducted about transnational terrorism seek to create a relationship between the sources of transnational terrorism and other identified variables. Therefore, due to the increase of the criminal actions and terrorist attacks in MENA member countries during recent years, this paper was aimed at the investigation of spatial effects of the two mentioned categories on the military expenditures of the selected countries during the period from 2003 to 2016 using spatial panel regression model. The results of the study confirmed the existence of the spatial spillovers so that the occurrence of terrorism in a country has a positive and significant impact on both terrorism and the military expenditures of the neighboring country. Also, the distinction between direct and indirect effects in this study suggested that the indirect effects of terrorism phenomenon were greater than its direct effects. In addition, based on the analysis of the estimation outputs, the findings of the study indicated that criminal actions had no significant effect on the military expenditures which expressed the fact that there was no spatial spillovers between criminal actions and military expenditures as well.