military spendings and economic growth in opec selected countries: granger causality test in heterogeneous mixed panels approach

this study investigates the causal linkages between military spending and economic growth in opec selected countries (i.e. algeria angola nigeria venezuela iran kuwait saudi arabia and ecuador) by focusing country specific analysis for the period 1995–2012. for this the panel causality testing approach the method developed by emirmahmutoglu and kose (2011) based on the vector autoregressive (var) model and wald tests with the country specific bootstrap critical values is applied. this test accounts cross dependency and heterogeneity among the members of the panel and also co integration between variables. the results confirm the growth military spending hypothesis for algeria nigeria iran and kuwait and verify the neutrality hypothesis for angola venezuela saudi arabia and ecuador. also the growth military spending hypothesis for the total panel is confirmed.