Mert Topcu

Defense spending and economic growth: Extended empirical analysis for the European Union

Previous empirical studies on the defense spending-economic growth nexus such as Kollias et al. (2007), Mylonidis (2008), Dunne and Nikolaidou (2012) analyzed this relationship in the case of the EU15. This study extends the analysis with the inclusion of more EU members and investigates the long run causal ordering between the two variables. Findings reported herein are not uniformed across all EU members. It is also found that end of Cold War has significant negative impact on defense expenditures of former east-European countries.

The financial development–energy consumption nexus revisited

ABSTRACT This study investigates the impact of financial development on energy consumption for a panel of 32 high-income countries over the period 1990–2014. Unlike previous studies, this analysis incorporates the bond market alongside the banking sector and the stock market in defining financial development. This study utilizes principal component analysis to construct indices for each of the three financial sectors (banking sector, stock market, and bond market) as well as an overall financial development index. Moreover, unlike previous studies, this study also implements heterogeneity panel estimation techniques. The results of this study reveal the absence of a statistical relationship between the overall financial development index and energy consumption. However, it is observed that an increase in the stock market index yields a slight decline in energy consumption. Policy implications pertaining to the empirical results are also discussed.

Some empirics on the convergence of carbon dioxide emissions intensity across US states

ABSTRACT This study examines the convergence of carbon dioxide emissions intensity across the 50 US states including the District of Columbia over the period 1997–2013 using a battery of tests. The results from cross-sectional tests of β- and σ-convergence lend support for overall convergence in carbon dioxide emissions intensity. On the other hand, panel unit root tests with allowance for endogenous structural breaks reveal that relative carbon dioxide emissions intensity contains a unit root, hence the absence of stochastic convergence.

Military Expenditures and Economic Growth in Central and Eastern EU Countries: Evidence from the Post-Cold War Era

Although the relationship between military expenditures and economic growth is well documented for the old members of the European Union, empirically little is known for the new members. Thus, the goal of this paper is to investigate the economic impact of military expenditures in Central and Eastern European countries employing panel cointegration and causality methods for the period 1993–2013. Findings indicate that the variables in question do not move together in the long run and the direction of causality in the short run is from economic growth to military expenditures. The implications of the results for international relations are discussed.

Financial development and firm growth in Turkish manufacturing industry: evidence from heterogeneous panel based non-causality test

Abstract Inspired by the finance-led growth hypothesis at the aggregate level, this study predicates this hypothesis on microfoundations to investigate the causality between financial development and firm growth in Turkish manufacturing industry during the period 1989–2010. To this end, a recently developed non-causality approach proposed by Dumitrescu and Hurlin is applied. Empirical results in which heterogeneity and cross-sectional dependence are taken into consideration reveal the validity of a supply-leading hypothesis for the overwhelming majority of the subsectors. This result seems robust across the subsectors, regardless of the financial development proxy. On the other hand, there is also evidence that the results for the proxy of firm growth are not uniform across subsectors.