Modeling the relationship between military spending and stock market development (a) symmetrically in China: An empirical analysis via the NARDL approach

This research article investigates the extent to which military expenditure changes hold an asymmetric impact on stock market development in China, employing the nonlinear Autoregressive Distributed Lag (NARDL) approach. The NARDL results confirm that positive (negative) shocks in military spending have significant positive (negative) impact on stock market development in the long-run. Nonetheless, in the short-run, only the positive shocks in military spending have significant positive relationship with stock market deepening. Based on these outcomes, we conclude that the asymmetry in military expenditure shocks is a long-run rather than short-run phenomenon pertaining to stock market growth in China. The empirical outcomes of this research work give further insights to policymakers and investors. (C) 2020 Elsevier B.V. All rights reserved.