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The article explores the spin-off effect controversy surrounding the role of military spending in economic development by investigating its impact on output in six industries linked to the military. The article's econometric investigation does not support the case for spin-off effects. The results suggest that military spending's direct impact on output in each industry is negative or insignificant depending on whether adjustments for trade in armaments are made. The results also fail to substantiate physical and human capital spin-off effects. Based on these results, the article concludes that the case for spin-off effects has been exaggerated.
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Keywords: Industry-level impact; Military spending; Spin-off effects

Document Type: Research Article

Affiliations: 1: Department of Leadership, Policy and Organizations, Peabody College, Vanderbilt University, Nashville, TN 37203-5701, USA 2: Department of Economics, School of Business, Ohio Northern University, Ada, Ohio 45810

Publication date: 2002-01-01

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