Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This study examines the impact of government expenditure on imports. The empirical analysis is based on annual data of the euro area countries for the period 1995–2015. We employ econometric methods that mitigate heterogeneity and cross-sectional dependence. We provide empirical indications that the components of expenditure have different impact on imports demand. The findings of this study indicate that the import context of government expenditure is lower than the import context of others expenditure components. Finally, we find that an increase in government expenditure leads to an increase in imports; this implies that, ceteris paribus that it can lead to a deterioration of the trade balance.