EU demand for defense, 1990--2019: a strategic spatial approach (Q2052494)
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English | EU demand for defense, 1990--2019: a strategic spatial approach |
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EU demand for defense, 1990--2019: a strategic spatial approach (English)
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26 November 2021
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Summary: For 1990--2019, this study presents two-step GMM estimates of EU members' demands for defense spending based on alternative spatial-weight matrices. In particular, EU spatial connectivity is tied to EU membership status, members' contiguity, contiguity and power projection, inverse distance, and arms trade. At a Nash equilibrium, our EU demand equations are derived explicitly from a spatially based game-theoretical model of alliances. Myriad spatial linkages among EU members provide a robust free-riding finding, which differs from the spatial and non-spatial literature on EU defense spending. Even though the EU applies common trade policies and allows for unrestricted labor movement among members, members' defense responses adhered to those of a defense alliance. Moreover, EU defense spending exhibits positive responses to GDP and transnational terrorist attacks, and a negative response to population. During the sample period, EU members did not view Russia as a military threat.
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European Union (EU)
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spatial autoregression and connectivity
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alliance
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strategic free riding
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Nash equilibrium
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