DEFENCE AND PEACE ECONOMICS, vol.31, no.5, pp.550-564, 2020 (Peer-Reviewed Journal)
Article / Article
DEFENCE AND PEACE ECONOMICS
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Government investments, geopolitical risks, compensation hypothesis, efficiency hypothesis, panel data estimation techniques, PUBLIC-INVESTMENT, POLITICAL-ECONOMY, FISCAL-POLICY, GLOBALIZATION, UNCERTAINTY, DETERMINANTS, INEQUALITY
The paper examines the effects of geopolitical risks, measured by a new index for geopolitical risk, on general government investment (gross fixed capital formation). It uses panel data for 18 countries for the period from 1985 to 2015. Using panel fixed-effects and the corrected least squares dummy variable estimators, results indicate that geopolitical risks seem to exert a positive effect on government investment.