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Random coefficients models of arms imports

Smith, Ron P. and Tasiran, A. (2010) Random coefficients models of arms imports. Economic Modelling 27 (6), pp. 1522-1528. ISSN 0264-9993.

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Official URL: http://dx.doi.org/10.1016/j.econmod.2010.07.017

Abstract

This paper uses a large panel of data with up to 19 time-series observations for almost 150 countries to estimate models of arms imports. Qualitative evidence suggests a non-linear relationship. As income and military expenditure grow, the propensity to import first rises and then falls as a domestic arms industry develops. We face the difficulty that there is virtually no data on domestic arms procurement or production capability. We respond to this difficulty by adopting a random coefficient approach in order to identify any systematic influences on import propensity, through the impact of military expenditure, size of the armed forces or income on unobserved domestic production capability. While a clear non-linear pattern is apparent in the cross-section relationship, once one allows for parameter heterogeneity such a pattern is not apparent in the time-series. (C) 2010 Elsevier B.V. All rights reserved.

Item Type: Article
Keyword(s) / Subject(s): Sample selection, arms imports, random parameters
School or Research Centre: Birkbeck Schools and Research Centres > School of Business, Economics & Informatics > Economics, Mathematics and Statistics
Depositing User: Administrator
Date Deposited: 15 Jun 2011 15:56
Last Modified: 17 Apr 2013 12:20
URI: http://eprints.bbk.ac.uk/id/eprint/3409

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