Defense, Economic Growth and Energy Consumption in China

This paper aimed to test the dynamic relationship between economic growth, energy consumption and defence expenditure in China for the period 1987-2013. It was used to the bounds test approach to cointegration developed by Pesaran et al. (2001) and it was determined whether there was a short and a long-run relationship among defence expenditure, energy consumption and economic growth. It was found that defence and energy consumption has a positive and a statistically significant impact on economic growth of China. Further, it was applied the Granger causality and it was determined a positive and a significant causal relation between variables. (C) 2016 The Authors. Published by Elsevier B.V.