The arms trade and the euro changeover in 2002

Abstract

This paper examines the relationship between the adoption of the euro currency notes in 2002 and its effect on the arms trade market. Using data from the Norwegian Initiative on Small Arms Transfers (NISAT) for 54 countries, this research uses an ordinary least square regression method to measure this relationship. We also create an import index to measure the degree of proximity of the 54 countries with the 12 euro-currency countries. Results show that undeniably, countries with more ties to euro currency countries saw their arms trade increase before the introduction of the euro.