Geopolitical risks and defence spending dynamics in post -1991 Russia

This study examines the relationship between geopolitical risk (GPR) and military expenditure (milex) in Russia over 1991–2023, a period marked by substantial strategic and economic transformation. Employing the Bayer–Hanck cointegration technique, an ARDL error-correction model, and Granger-causality analysis, the results indicate that both Russia-specific and global GPR are positively associated with milex in the long-run. In the short run, global GPR has an immediate positive association with milex, whereas Russia-specific GPR is statistically insignificant, consistent with delayed fiscal adjustment. Granger-causality tests indicate that the country-specific GPR index for Russia predicts subsequent changes in milex; however, this predictive relationship does not establish structural causality or directly measure Russian official threat perceptions. Robustness checks using FMOLS and DOLS broadly support the positive long-run association between milex and GPR coverage involving Russia. The findings suggest that Russia-related GPR, as reflected in international press coverage, is associated with higher milex, although the results should not be interpreted as evidence of definitive structural causality.