The effect of defense expenditures on economic growth in Turkey and the analysis of convergence to selected world countries

Defense expenditures have positive and negative effects on the economies of countries around the world. Exporting defense industry products is of great importance for the positive effects of defense expenditures to emerge. While highly industrialized and developed countries come to the fore in defense industry production and exports, developing countries also aim to increase economic growth by investing in the defense industry and to catch up with developed countries with a convergence process. As one of the developing economies, Turkey stands out with its increasing defense industry expenditures and exports. In this thesis, the relationship between Turkey's defense expenditures and GDP growth is examined and the convergence of Turkey's defense expenditures of the USA, European Union, China and Russia is analyzed. The analysis findings based on the long-term ARDL error correction model showed that an increase in military expenditures will negatively affect GDP in the long run. The analysis results of various unit root tests showed that Turkey's defense expenditures converged to the defense expenditures of China and Russia, but the same convergence trend is not valid in the context of the USA and the European Union.