Military Spending and Economic Growth: A Comparison between Arms Importing and Exporting Countries

The importance of the economic resources spent on military spending every year in the world has led economists to pay particular attention to the impact of such spending on the economies of nations. The impact of military spending on economic growth can vary depending on various factors, such as the type of arms trade policy. In this regard, the main objective of this study is to review and compare the impact of military spending on the economic growth in the selected arms importing and exporting countries during the period 1995-2016. For this purpose, the model estimation method is used in the combined data. The findings of this study, using the Fixed Effects Estimator (FE), show a positive and significant effect of military spending on economic growth of arms exporting countries and a negative and significant effect of military spending on economic growth of arms importing countries. Therefore, if military spending is spent on developing advanced military industries and improving efficiency in this sector, it can be achieved by producing weapons and military equipment domestically, by creating employment, economic prosperity and arms exports to various countries around the world and improving the trade balance, Boosted economic growth.