| Model | Dependent Variables | Independent Variables Sign and Significance | ||||
| Exports_1 to 2 | Exports_2 to 1 | Imports_1 to 2 | Imports_2 to 1 | Explanation | ||
| (1) | Defense expenses—country 1 | +* | + |
|
| Only exports from country 1 to country 2 have a positive and statistically significant impact to the defense expenses of country 1 and country 2. All other variables have a positive but statistically insignificant effect. |
| (2) | Defense expenses—country 1 |
|
| + | + | |
| (3) | Defense expenses—country 2 | +* | + |
|
| |
| (4) | Defense expenses—country 2 |
|
| + | + | |