International Journal of English Literature and Social Sciences, 5(6) Nov-Dec 2020 | Available online: https://ijels.com/ The Determinants of Defense Expenditure in China’s Peaceful Rise Lixiang Chen1,2

1Institute of Finance and Economics, Central University of Finance and Economics, Beijing, China; 2Department of Economics and Management, Taiyuan Institute of Technology, Taiyuan, China

Received: 23 Nov 2020; Received in revised form: 16 Dec 2020; Accepted: 22 Dec 2020; Available online: 27 Dec 2020 ©2020 The Author(s). Published by Infogain Publication. This is an open access article under the CC BY license (https://creativecommons.org/licenses/by/4.0/).

Abstract—The determinants of defense expenditure demand are mainly military activities, economic factors, political environment, and other related factors. Based on this, this paper analyzes and tests the characteristics of China's defense expenditure demand from 1952 to 2016.The empirical analysis is based on the autoregressive distributed lag model-Bound Test, to analyze the long-term co-integration relationship between defense expenditure demand and its determinants. Meanwhile, the results show that the long-term elasticity of China's defense expenditure demand is higher than the short-term elasticity. Keywords—defense expenditure demand, autoregressive distributed lag model, bounded co-integration test.

I. INTRODUCTION billion U.S. dollars), and China's defense expenditure in Since the end of 1990s, China's defense expenditure has 2016 announced by the internationally renowned research been in a relatively rapid growth period. According to institute SIPRI is 215.176 billion U.S. dollars (about Chinese official data, China's defense expenditure has 1,463.111 billion yuan). This can be explained by different maintained double-digit growth in recent years. Officials statistical calibers and different definitions of defense and researchers in many western countries believe that expenditure. At the same time, with the rapid development China's actual defense expenditure is far greater than the of China's economy since the reform and opening, China's officially announced data, and point out that China's international influence has increased rapidly, and China's officially announced defense expenditure only accounts for role in the development of the world economy has become a part of its total defense expenditure in SIPRI Yearbook increasingly important. Therefore, the growth of China's (2004). China's defense budget in 2016 (the plan for the defense expenditure has also triggered the rise of the two sessions) is 954.354 billion yuan (about 104.354 "China threat theory".

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1600 1400 1200 1000 800 600 400 200

0

1956 1995 1953 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1998 2001 2004 2007 2010 2013 2016 1950

Fig.1: Actual value of defense expenditure (100 million RMByuan)

China’s defense expenditure was at a fluctuated frequently, which was determined by the relatively low level at the beginning of the founding of the external environment. Fig.1 shows the trend of the actual People’s Republic of China in 1949. Before the 1980s, value of China's defense expenditure, and Fig.2 shows that China’s defense expenditure fluctuated frequently due to China's defense burden has been declining and tending to the contradiction between consolidating the new regime stabilize. and building the country. China’s defense expenditure

0.1

0.08

0.06

0.04

0.02

0

1956 1971 1986 2001 2016 1953 1959 1962 1965 1968 1974 1977 1980 1983 1989 1992 1995 1998 2004 2007 2010 2013 1950 Fig.2.: National defense burden (%)

According to China's official data, between 1979 to 2008 was 5.44% (1979), and the lowest was 1952 and 1978, the highest proportion of China's defense 1.01% (1996). This period can be divided into three stages. expenditure to GDP was 9.14% (1953), and the lowest was In the first stage, from 1979 to 1987, China's defense 3.81% (1958). After 1979, in order to support the country's construction was in a state of low investment and economic construction, defense expenditures were in a maintenance. The defense expenditure increased by an period of relative contraction, making China's defense average of 3.5% per year. In the same period, GDP grew expenditures at a relatively low level during this period. by an average of 14.1% per year at current prices, the From 1979 to 2008, the highest proportion of national national fiscal expenditure increased by an average of defense expenditure in fiscal expenditure was 17.39% 10.4% annually. The proportion of defense expenditure in (1979), and the lowest was 6.68% (2008); the highest GDP and national fiscal expenditure dropped from 4.6% proportion of national defense expenditure to GDP from and 14.96% in 1978 to 1.74% and 9.27% in 1987. In the

ISSN: 2456-7620 https://dx.doi.org/10.22161/ijels.56.61 2239 International Journal of English Literature and Social Sciences, 5(6) Nov-Dec 2020 | Available online: https://ijels.com/ second phase, from 1988 to 1997, in order to make up for II. FACTORS INFLUENCING DEFENSE the lack of national defense infrastructure and maintain EXPENDITURE DEMAND national security and unity, China gradually increased its General research on defense expenditure demand can be defense investment based on its continuous economic divided into transnational regression model and time series growth. The average annual growth rate of defense analysis based on single country according to different expenditure was 14.5%. In the same period, GDP grew by research countries. The factors that determine the demand an average of 20.7% per year at the current price. The for defense expenditure are also divided into several average annual growth rate of national fiscal expenditure categories: military activities, economic factors, political increased by 15.1%. The proportion of defense environment, and other related factors. expenditure in GDP and national fiscal expenditure According to foreign scholars, Gadea et al. continued to decline. In the third phase, from 1998 to (2004) analyzed the influencing factors of long-term 2008, in order to maintain national security and (1960-1999) defense expenditure demand by homogenizing development interests and meet the needs of military the 15 NATO member States. Including income, external reform with Chinese characteristics, China continued to threats, and allied spending. The threat of civil war also has maintain a steady increase in defense expenditures based a very significant impact on the security of developing on rapid economic growth. Defense spending increased by countries. Paul pointed out that the threat of civil war an average of 15.9% per year. During the same period, exceeded the external threat, Collier &Hoeffler (1998) GDP increased by 12.5% at the current price, and national measured the internal threat by estimating the possibility of fiscal expenditure increased by 18.4%. From 2008 to 2016, civil war, and had similar results. Dunne, Perlo Freeman, & the scale of defense expenditure levels continued to grow Smith (2008) also pointed out that civil war played an steadily, but the average annual growth rate of defense important role in the demand of defense expenditure. expenditure dropped to 9.2%, which is consistent with the slowdown in economic growth during the same period. The overall economic environment has a long-term basic constraint on national defense expenditure. As can be seen from the development process Looney & Mehay (1989) pointed out that internal economic of China's national defense expenditure, the scale of factors such as economic development level, actual national defense expenditure is constantly rising, but the economic growth, government budget and the interaction burden of national defense has been kept at a low level, between defense and industrial complex are all very and the proportion of national defense expenditure in fiscal important influencing factors of defense expenditure expenditure has been gradually decreasing. What demand. National income is widely regarded as the most determines China's defense spending needs? This paper important factor. In terms of international economic impact, introduces from several parts, first introduces the research Maizels & Nissanke (1987)believe that the increase of status of the determinants of national defense expenditure foreign exchange reserves, foreign capital and international demand at home and abroad, to understand that many military assistance are important factors affecting the factors that affect national defense expenditure have demand for defense expenditure. Dunne, Smith, & different influences on different countries. The general Willenbockel (2005) research uses trade volume (total experience is to establish the empirical model of national import and export) to measure the impact of economic defense expenditure demand decision, and analyze and openness on defense expenditure demand. The results show expand on this basis. The second part introduces the that the total trade volume has a significant positive impact general influencing factors, the third part constructs the on the defense expenditure demand of developing theoretical model, and the fourth part makes empirical countries. analysis. The fifth part gives the empirical results. In terms of political factors, the type of

government and political stability are also important factors for the defense expenditure demand of developing countries. ISSN: 2456-7620 https://dx.doi.org/10.22161/ijels.56.61 2240 International Journal of English Literature and Social Sciences, 5(6) Nov-Dec 2020 | Available online: https://ijels.com/

West believes that the most important factor of defense (1960-1980,1981-1999). It was found that the dominant expenditure demand is the interaction between domestic factors of national defense expenditure demand changed in bureaucracy and politics. Harris also believes that the different stages, from security threats in the early stage to relative capabilities and spheres of influence of military economic factors in the later stage. blocs will affect defense expenditure and distribution. In The demand for defense expenditure in a single addition to being affected by political stability, changes in country is based on time series analysis, and can be policy, especially in defense policy, also affect a country's empirically analyzed by using the unique military, defense expenditure. economic, political, and other factors of the country. In the Population variable is widely used in the empirical analysis method, the autoregressive distributed demand equation of defense expenditure. This variable may lag model ARDL and Solomon (2005) are used to analyze be regarded as a default security factor, which can reduce the determinants of Canada's defense expenditure demand the demand of defense expenditure. In addition, the theory from 1952 to 2001. The ARDL model is used to estimate of public goods holds that as a pure public goods, and test the cointegration and long-term relationship improving security benefits to more people will make between defense expenditure and its determinants. defense expenditure more efficient. Nikolaidou (2008) analyzed the decisive factors of the Among other factors, regional factors are used defense expenditure demand of the 15 EU countries from to reflect the influence of "bad neighbor relationship" and 1961 to 2015, built the ARDL model and tested each "contagion" on the demand of defense expenditure. Last country separately, and found significant common factors year's defense spending is also one of the best indicators of and individual factors that determined the defense demand. current defense spending. In the empirical analysis, the lag Abdelfattah, Abu-Qarn, Dunne, & Zaher (2014)used the variable of defense expenditure is added to the most dynamic model to analyze the cointegration relationship explanatory variable. between Egyptian defense expenditure demand and determinants, and used the test of endogenous structural Many domestic scholars have focused on the breakpoints when estimating the cointegration relationship. relationship between China's defense expenditure and The long-term cointegration with time breakpoints is more economic growth, while few have studied the influencing significant than the general cointegration method. Domestic factors of defense expenditure demand. By analyzing the scholars Jiang Yiwen and Luo Min (2005) used determinants of defense expenditure, Lu Zhoulai found that autoregressive distributed lag model to estimate the China's defense expenditure is related to national income, determinants of China's defense expenditure demand military expenditure of threatening party or potential (1978-2003), and found that the long-term elasticity and threatening party. Sun & Yu (1999) used the American short-term elasticity of China's defense expenditure demand Arms Control and Sanctions Agency (ACDA) and Chinese are both inelastic. official data to study China's defense expenditure demand from 1965 to 1993, showing that China's defense Based on the previous analysis, the expenditure was affected by national income, threatening decisive factors of defense expenditure demand in a single national and regional defense expenditure and time lag country or across countries are generally considered from variables, while the reform and opening-up policy in 1979 military, political and economic aspects, but the analysis of had a negative impact on China's defense expenditure. a single country should also consider the differences of However, the border conflict has no significant impact on special factors in combination with the actual situation in China's defense expenditure demand. Bing-Fu & Liming China. This paper also focuses on the time series analysis of (2006)analyzed the determinants of national defense national defense expenditure of a single country, and the expenditure before and after China's transformation (reform decisive factors are mainly economic factors and external and opening), and analyzed the changes of determinants of threats. In terms of political stability, China's political national defense expenditure demand in two sub-stages stability has been generally stable since the founding of the ISSN: 2456-7620 https://dx.doi.org/10.22161/ijels.56.61 2241 International Journal of English Literature and Social Sciences, 5(6) Nov-Dec 2020 | Available online: https://ijels.com/

People's Republic of China, and its national defense policy w can be expressed as a function of safety s and total has always been based on non-alignment and active defense, consumption c of economic variables. which can be expected to have little impact on China's Social welfare function: national defense expenditure. In addition, in the method of W=W(S, C) (1) empirical analysis, combined with the characteristics of defense expenditure budget system, this paper also uses The national budget constraint is expressed as:

autoregressive distributed lag model, namely ARDL model, 푌푡 = 푃퐶푡퐶푡 + 푃푚푡푀푡(2) to analyze the long-term cointegration relationship between Y is nominal gross income, Pm and Pc represent defense expenditure demand and determinants. In the actual defense expenditure and consumption price co-integration test method, the usual E-G two-step method respectively. and Johansen test are not used, but the boundtest Security is also an unobservable and difficult co-integration test, which was put forward and applied by variable to quantify. Generally, it is expressed by Pesaran, Shin, & Smith (2001), has been recognized in the substitution variables, such as the military strength M of our mainstream economic fields abroad. However, there are not country, the military strength Mi of other countries and the many achievements applied to the field of national defense strategic variable Z. Therefore, the safety function is economy in China, but it is more appropriate to use this expressed as: method to analyze the decision of national defense expenditure demand, or to analyze the long-term and S = S(푀, 푀푖, Z)(3) short-term impact of national defense expenditure demand. In general, security depends on the stock of military forces rather than the flow-defense expenditure. Military strength stock includes military equipment and III. THEORETICAL FRAMEWORK OF DEFENSE human capital, which can be defined as the sum of historical EXPENDITURE DEMAND defense expenditures after depreciation. There are two theoretical models for studying the decision 퐾 = 푀 + (1 − 훿)퐾 (4) of defense expenditure: one is Richardson's arms race 푡 푡 푡−1 model; The other is based on neoclassical model, Here, δ stands for depreciation rate, integrating economic, political, and strategic factors, and representing the current national defense capital stock, and using comparative analysis. Richardson's model is suitable 1 represents the past national defense capital stock. In this for countries in conflict, and the empirical results can't way, the equation (1)-(4) can be expressed by the demand explain the reality well. At present, some studies have function of defense expenditure. integrated these two methods, introducing the dynamic Mt = M(Pmt , Pct , Yt , Kt−1, K1t , Z) (5) arms race into the demand model, using a more complex The general dynamic formula of defense structural model instead of the action response framework, expenditure demand can be expressed as: and comprehensively considering economic, political, and Mt =β0δ+β1yt −β1(1−δ)yt−1 + (β2 + military factors. (1−δ))Mt−1 +β3M1t +β4Z (6) The model adopt in this paper is based on that Of course, specific forms can be considered for neo-classical demand model established by Smith (1980, studying different factors of a single country. 1987, 1995), assuming that social welfare is a function of civil output and safety. Defense expenditure is one of the factors that determine security. The government's function IV. EMPIRICAL ANALYSIS is to balance the security utility brought by increasing In order to facilitate the research, the model of empirical national defense expenditure and the opportunity cost of test is defined as a general dynamic model, and the function national defense expenditure (reduction of civil output) in form is: order to maximize social welfare. Therefore, social welfare ISSN: 2456-7620 https://dx.doi.org/10.22161/ijels.56.61 2242 International Journal of English Literature and Social Sciences, 5(6) Nov-Dec 2020 | Available online: https://ijels.com/

mil = F(Y, ∑푖 푚푖푙 , 푝표푝, 푧） (7) Institute. Russia's data is only from 1992 to 2015, and In equation (7) mil represents the actual value Taiwan's data is also from 1976 to 2015. Therefore, in the of China's defense expenditure (1978 price index as the process of model estimation, due to the lack of complete base period), Y represents the actual value of GDP (1978 data, the full sample analysis of these two parts of data was price index as the base period), ∑ represents the actual value not carried out. The data of other countries are all in US of defense expenditure of other countries, mainly dollars, which are not converted into RMB by exchange rate, considering external threats and neighboring countries, but in logarithmic form to eliminate dimensional mainly the United States, Japan, India, Russia, and Taiwan. differences. The data of China's defense expenditure comes POP is a logarithmic form representing the total population, from the data of China Statistical Yearbook and Ministry of and z represents other political or threat variables. Other Finance, covering the period from 1952 to 2016. Specific countries' defense expenditure data comes from SIPRI2016, variable selection and description are shown in the which is the yearbook data of Stockholm Peace Research following table. Table 1. Variable Description and Data Source

Variable Meaning Source name

lnmilitray Logarithmic form of China's defense expenditure Ministry of finance lngdp Logarithm of China's GDP statistical bureau lnpop Logarithmic form of China's total population statistical bureau lnUSA Logarithmic form of US defense expenditure SIPRI lnRUSSIA Logarithmic form of Russia defense expenditure SIPRI lnJAPAN Logarithmic form of Japan defense expenditure SIPRI lnINDIA Logarithmic form of India defense expenditure SIPRI Z For polity, other virtual variables, such as time

In this paper, the autoregressive distributed lag solve this problem in the previous literature: one is to use model (ARDL) developed by Pesaran and Shin(1999) is quarterly or monthly data to artificially increase the sample adopted. The advantage of this method is to analyze the size, but this practice has been questioned. Hakkio& Rush long-term cointegration relationship between variables, and (1991) found that using quarterly or monthly data to if the lag order of ARDL model is determined, the estimated increase the sample size cannot increase the robustness of values of long-term parameters and short-term parameters cointegration test, which mainly depends on the time span can be obtained by using the least square method, and rather than the number of observed values; Another method reasonable gradual inference can be obtained, which is is to extend the time span and include the data before 1980s, impossible for other cointegration methods. Cointegration but this is based on the theoretical model of market method is also a bounded cointegration test proposed by economy to analyze the behavior under the condition of Pesaran et al. (2001). The commonly used EG two-step planned economy, and the methodology itself has problems. method and Johansen test method have a problem Bounded method also has a good characteristic, that is, it corresponding to China's data test, that is, the small sample can be used regardless of the stationarity of regression problem, the time span is small, the test value will be biased, variables, that is, whether the regression variables are the cointegration relationship may be unreliable, and the horizontally stationary or first-order unitary. In contrast, analysis results lack robustness。There are two methods to Johansen method and EG method can only be used to

ISSN: 2456-7620 https://dx.doi.org/10.22161/ijels.56.61 2243 International Journal of English Literature and Social Sciences, 5(6) Nov-Dec 2020 | Available online: https://ijels.com/ analyze non-stationary variables with the same unitary added ARDL model is more convenient to calculate. By order (I(1)), which requires the unit root test of variables comparing ARDL models with different lag orders, it is first, and in this process, subjectivity and uncertainty will found that ARDL (2,2,2) is the second-order lag variable of inevitably be introduced to a certain extent. Therefore, this explanatory variables including LNGDP, LNPOP, and the paper also tests based on ARDL-ECM model combined second-order lag variable of explained variable LNMILITY, with bounded cointegration test method. and the regression parameters are significant except At first, the self-regressive distribution lag mode and error constant terms. This shows that China's defense expenditure correction mode, ARDL(p,q),ECM(i) are given, and the key is significantly affected by income, population, and the is to determine the lag order. Generally, AIC and SC criteria level of past defense expenditure, but the bounded test has a are used for selection. significant result at 10% there is a long-term cointegration relationship at 10%. However, this model does not consider The ARDL model can be expressed as: the external factors affecting defense expenditure and the 퐷푙푛푚푖푙푖푡푦 = 훽 + ∑푘 훽 퐷푙푛푔푑푝 + 푡 0 푖=0 1푖 푡−푖1푖 expenditure scale of other countries. Therefore, this model 푘 푘 ∑푖=0 훽2푖퐷푙푛푝표푝푡−푖 + ∑푖=1 훽3푖퐷푙푛푚푖푙푡푦푡−푖 + ARDL(3,4,4,1,1,2) is a model with the defense expenditure 푘 푘 ∑푖=0 훽4푖 퐷푙푛푢푠푎푡−푖 + ∑푖=0 훽5푖퐷푙푛푗푎푝푎푛푡−푖 + variables of the United States, India, and Japan. Most of the 푘 ∑푖=0 훽6푖퐷푙푛푖푛푑푖푎푡−푖 + λECM푡−1 + 휇푡 (8) parameter results are still significant, but some parameters D in the above equation (8) represents the become insignificant, and the maximum lag term also difference term, in which ECM is the error correction term. increases. As to the variables of income, LNGDP is ARDL model also analyzes the long-term relationship and significant only when it lags the first period, while the short-term relationship between variables. The coefficient parameters of the current level of expenditure in the United of the difference term indicates the short-term relationship States are not significant, while the current and 10 periods coefficient or short-term elasticity, while the error of Indian defense expenditure are not significant. Then the correction term (9) indicates the adjustment of the bounded cointegration test results are significant at 1% long-term equilibrium relationship, and the coefficient λ is level. It shows that after adding external threat factors, the the error adjustment parameter, indicating the adjustment results are relatively in line with expectations, but some range of the long-term equilibrium relationship. Coefficient parameters are not significant. Finally, after adjusting the is the long-term elastic coefficient. external factors, only the influence of the US and Japan's Then bounded cointegration test is Wald joint defense expenditure factors is retained, and the result is also test (F test) for lag variables in error correction model. The significantly improved after removing the Indian factor. That is to say, the model parameter ARDL(4,1,2,1,1) is specific original hypothesis is 훼1=훼2=훼3=훼4=훼5 = 0，If the original hypothesis holds, there is no cointegration more remarkable. Of course, we should also consider other relationship among variables; otherwise, the alternative virtual variables, such as major political and military events hypothesis holds, which indicates that there is cointegration (1962,1969,1979.1997). Adding time virtual variables will relationship among variables. make the model parameters change little, and the parameters of virtual variables themselves are not

significant. Adjustment of other control variables, such as V. EMPIRICAL RESULTS polity, cannot improve the model results, so the model The empirical results of the specific model are realized by ARDL(4,1,2,1,1) is finally determined, and the results of Eviews9.0. The estimation method of software version 9.0 bounded test are shown in the following Table.2.

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Table.2 Bounded cointegration test

ARDL(2，2，2) ARDL(4,1,2,1,1) ARDL(3,4,4,1,1,2)

F F F k=2 k=4 k=5 4.332913* 10.76084*** 5.826012*** I(0)

* The result is significant at 10% significance level, * * * the result is significant at 1% level, and K is the biggest lag term

Finally, the autoregressive distributed lag ARCH and normal distribution test, were carried out on the model is ARDL(4,1,2,1,1), in which the insignificant lag long- term equilibrium relationship model. It was found that variables are removed, and the regression equation and the results were all in line with expectations, and there was error correction model of long-term relationship are given no sequence correlation and heteroscedasticity, and they in Table.3. A series of robustness tests, such as sequence obeyed normal distribution. correlation LM test, conditional heteroscedasticity test Table.3 Long-term cointegration equation and error correction equation results

Cointegrating Form: ECM-ARDL dependent variable DLNMITY Long Run Coefficients: ARDL (4,1,2,1,1)

Std. Std. Variable Coefficient t-Statistic Prob. Variable Coefficient t-Statistic Prob. Error Error D(LNMITY(-1)) 0.319106 0.103869 3.072207 0.0036 LGDP -1.963677 0.676615 2.902208 0.0057 D(LNMITY(-2)) -0.14225 0.039379 -3.612376 0.0007 LNPOP 2.623775 0.672307 3.902642 0.0003 D(LNMITY(-3)) -0.07704 0.040594 -1.897808 0.064 LNJAPAN 0.904326 0.366715 2.466015 0.0175 D(LGDP) 0.068841 0.067681 1.017138 0.3144 LNUSA -0.371042 0.581562 -0.63801 0.5266 D(LNPOP) 0.974271 0.052379 18.600471 0 C 8.926942 8.270024 1.079434 0.286 D(LNPOP(-1)) -0.46618 0.112464 -4.145155 0.0001

D(LNJAPAN) 0.758321 0.17729 4.277303 0.0001

D(LNUSA) 0.161534 0.074846 2.158201 0.0362

ECM(-1) -0.07744 0.027486 -2.817537 0.0071

ECM= LNMITY - (-1.9637*LGDP + 2.6238*LNPOP + 0.9043*LNJAPAN -0.3710*LNUSA + 8.9269 )

From the results, the long-term elasticity of LNPOP, 0.75 for Japanese defense expenditure and 0.16 for LNMITY about LNGDP is 1.9637, and the sign is negative; US defense expenditure. The long-term elasticity of China's The long-term elasticity of LNMITY is 2.62 for LNPOP, defense expenditure to domestic economic factors is greater 0.9 for Japanese defense expenditure, and 0.37 for than the short-term elasticity, and the response to external American defense expenditure, which is also negative. The threats, that is, the long-term and short-term elasticity of short-term elasticity of LNM is 0.069 for LNGDP, 0.97 for defense expenditure of other countries is not large. At the

ISSN: 2456-7620 https://dx.doi.org/10.22161/ijels.56.61 2245 International Journal of English Literature and Social Sciences, 5(6) Nov-Dec 2020 | Available online: https://ijels.com/ same time, the adjustment size of error correction of [7] Hakkio, C. S., & Rush, M. (1991). Cointegration: how short long-term equilibrium relationship is 0.07, which is not is the long run? Journal of international Money and Finance, very large. This is a high-order autoregressive feature of the 10(4), 571-581 performance of China's defense expenditure, which also [8] Looney, R. E., &Mehay, S. (1989). Causal factors in United shows that it is influenced by the base rolling budget system States postwar defense spending: The empirical dimension. of defense expenditure. Overall, the decisive factor of Defense Analysis, 5(2), 155-157 China's national defense expenditure is mainly influenced [9] Maizels, A., &Nissanke, M. K. (1987). The causes of by domestic economic factors, and of course, external military expenditure in developing countries. Deger, S. et threats must also be taken seriously. Of course, the West, R.(dir. pub.) Defence, Security and Development, empirical results are also questionable. Here, the time Frances Pinter, 129-139 trends and breakpoints have not been eliminated. When [10] Nikolaidou, E. (2008). The demand for military expenditure: Chen Bingfu (2006) analyzed the changes of defense Evidence from the EU15 (1961–2005). Defence and Peace expenditure before and after the reform and opening, the Economics, 19(4), 273-292 defense expenditure was mainly affected by external threats [11] Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds before the reform, and then mainly by the economic factor. testing approaches to the analysis of level relationships. In this paper, we try to consider the breakpoints in Journal of applied econometrics, 16(3), 289-326 long-term cointegration, such as 1979 and 1997, but the [12] Solomon, S. M. (2005). Spatial and temporal variability of results are not obviously improved. Perhaps the data shoreline change in the Beaufort-Mackenzie region, sources and processing, sample size are related, and other Northwest Territories, Canada. Geo-Marine Letters, 25(2-3), control variables are considered. This is also worthy of 127-137 further study and discussion. [13] Sun, Q., & Yu, Q. (1999). Determinants of China's military expenditures: 1965-93. Journal of Peace Research, 36(1), 23-33 REFERENCES [14] Yearbook, S. (2004). Stockholm International Peace [1] Abdelfattah, Y. M., Abu-Qarn, A. S., Dunne, J. P., & Zaher, Research Institute. Armaments Disarmament and S. (2014). The demand for military spending in Egypt. International Security, various years. Defence and Peace Economics, 25(3), 231-245 [2] Bing-Fu, C., & Liming, Z. (2006). The determinants of China's defense expenditure before and after transition. Conflict Management and Peace Science, 23(3), 227-244 [3] Collier, P., &Hoeffler, A. (1998). On economic causes of civil war. Oxford economic papers, 50(4), 563-573 [4] Dunne, J. P., Perlo Freeman, S., & Smith, R. P. (2008). The demand for military expenditure in developing countries: hostility versus capability. Defence and Peace Economics, 19(4), 293-302 [5] Dunne, J. P., Smith, R. P., &Willenbockel, D. (2005). Models of military expenditure and growth: A critical review. Defence and peace economics, 16(6), 449-461 [6] Gadea, J., Sellés, E., Marco, M. A., Coy, P., Matás, C., Romar, R.,... Ruiz, S. (2004). Decrease in glutathione content in boar sperm after cryopreservation: Effect of the addition of reduced glutathione to the freezing and thawing extenders. Theriogenology, 62(3-4), 690-701 ISSN: 2456-7620 https://dx.doi.org/10.22161/ijels.56.61 2246