The strong positive association between weapons exports and crude oil imports is confirmed, regardless of whether we use the SIPRI or the BVCI data on weapons exports.
When we use the BVCI data, we find that countries that experienced or were likely to experience an internal or external conflict had higher arms exports than countries that did not.
The estimated coefficient on total arms deliveries reported in Tables 3 and 4 is statistically significant at the 10% level at best and only when we use the BVCI data on arms exports.
The coefficient on crude oil exports is positive and statistically significant for the SIPRI and the BVCI data and we cannot reject the one-tailed null hypothesis of a positive association between arms imports and crude oil exports.
Smith and Tasiran (2005) use the ratio of the value of arms imports published by the BVCI to the volume of arms imports published by the SIPRI as a proxy for the sale price of weapons.
The full data set of 955 observations yields statistically significant coefficients and marginal effects for crude oil exports for both the SIPRI and the BVCI data.
For the BVCI data, none of the coefficients and marginal effects for Polity2 and the corruption index reported in Tables 5, 6, and Al are statistically significant.
The only case where the statistical significance gets eroded under this specification is when we exclude the United States from the BVCI data set under the exports analysis but retain our binary conflict measure, though the estimated coefficient retains a positive sign even in this case.
The CoW-based measure of conflict has a positive and significant coefficient in the arms exports and imports models and with both the SIPRI and the BVCI data.
The coefficient on crude oil exports remains positive and significant for the SIPRI and BVCI data sets when all countries are included in the analysis but not significant at the traditional significance levels when Saudi Arabia is excluded from the analysis.
TABLE A1 Arms Imports (Smith-Tasiran Measure of Arms Price) Full Data Set Variable SIPRI Data BVCI Data Crude oil exports 0.
BVCI first converts national nominal values to national real values using national gross domestic product deflators and then uses the annual market exchange rate to convert to USS.