The defense industry in an age of austerity
DOI:
https://doi.org/10.15355/epsj.8.1.18Keywords:
BAE, EADS, defense industry, military budgetsAbstract
Reductions in military expenditure will generate pressures to restructure the defense industry. This article explores the implications of a more peaceful evolution of military expenditure for the economic structure of this industry. For example, since military expenditure and defense industry concentration have moved in opposite directions in the past, future cuts in such spending might be expected to lead to a more concentrated industry. Although eventually thwarted in 2012, the proposed merger of defense industry giants BAE and EADS – which would have created the world's largest defense firm – is discussed in some detail as a potential harbinger of defense consolidation to come.References
Brauer, J. 2007. “Arms Industries, Arms Trade and Developing Countries.” Chapter 30 in T. Sandler and K. Hartley, eds. Handbook of Defense Economics. Vol. 2. Amsterdam: North-Holland.
Brzoska, M. 2007. “Success and Failure in Defense Conversion in the ‘Long Decade of Disarmament’.” Chapter 34 in T. Sandler and K. Hartley, eds. Handbook of Defense Economics. Vol. 2. Amsterdam: North-Holland.
Caruso, R. and A. Locatelli. 2013. “Finmeccanica Amid International Market and State Control: A Survey of the Italian Defense Industry.” Defense and Peace Economics. Vol. 24, No. 1, pp. 89-104.
Dunne, J.P. 1995. “The Defense Industrial Base.” Chapter 14 in T. Sandler and K. Hartley, eds. Handbook of Defense Economics. Vol. 1. Amsterdam: North-Holland.
Dunne, J.P. 2009. “Developments in the Global Arms Industry from the End of the Cold War to the Mid-2000s,” pp. 13-37 in R. Bitzinger, ed. The Modern Defense Industry: Political, Economic and Technological Issues. Westport, CT: Praeger.
Dunne, J.P., M. Garcia-Alonso, P. Levine, and R.P. Smith. 2007. “Determining the Defense Industrial Base.” Defense and Peace Economics. Vol. 18, No. 3, pp. 199-222.
Hartley, K. 2007. “The Arms Industry, Procurement and Industrial Policies.” Chapter 33 in T. Sandler and K. Hartley, eds. Handbook of Defense Economics. Vol. 2. Amsterdam: North-Holland.
SIPRI Yearbook. Various years. Armaments, Disarmament and International Security. Oxford, UK: Oxford University Press for Stockholm International Peace Research Institute.
Smith, R.P. 1990. “Defense Procurement and Industrial Structure in the UK.” International Journal of Industrial Organization. Vol. 8, No. 2, pp. 185-205.
Smith, R.P. 2001. “The International Arms Industry.” World Economics. Vol. 2, No. 3, pp. 155-166.
