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Defence firms facing liberalization: innovation and export in an agent-based model of the defence industry

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  • Blom, Martin
  • Castellacci, Fulvio
  • Fevolden, Arne

Abstract

The paper presents an agent-based simulation model of the defence industry. The model resembles some of the key characteristics of the European defence sector, and studies how firms in this market will respond to the challenges and opportunities provided by a higher degree of openness and liberalization in the future. The simulation analysis points out that European defence firms will progressively become more efficient, less dependent on public procurement and innovation policy support, and more prone to knowledge sharing and inter-firm collaborations. This firm-level dynamics will in the long-run lead to an increase in the industry’s export propensity and a less concentrated market.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 35702.

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Date of creation: 03 Jan 2012
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Handle: RePEc:pra:mprapa:35702

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Keywords: Defence industry; liberalization; EU; export; innovation; agent-based simulation model;

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  1. Giovanni Dosi & Giorgio Fagiolo & Andrea Roventini, 2008. "Schumpeter Meeting Keynes: A Policy-Friendly Model of Endogenous Growth and Business Cycles," Working Papers, University of Verona, Department of Economics 50/2008, University of Verona, Department of Economics.
  2. Franco Malerba & Fabio Montobbio, 2003. "Exploring factors affecting international technological specialization: the role of knowledge flows and the structure of innovative activity," Journal of Evolutionary Economics, Springer, Springer, vol. 13(4), pages 411-434, October.
  3. Malerba, Franco & Orsenigo, Luigi, 1996. "Schumpeterian patterns of innovation are technology-specific," Research Policy, Elsevier, Elsevier, vol. 25(3), pages 451-478, May.
  4. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, Elsevier, vol. 13(6), pages 343-373, December.
  5. Gilbert, Nigel & Ahrweiler, Petra & Pyka, Andreas, 2007. "Learning in innovation networks: Some simulation experiments," Physica A: Statistical Mechanics and its Applications, Elsevier, Elsevier, vol. 378(1), pages 100-109.
  6. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521447287.
  7. Frenken, K. & Nuvolari, A., 2003. "The Early Development of the Steam Engine: An Evolutionary Interpretation using Complexity Theory," Eindhoven Center for Innovation Studies (ECIS) working paper series, Eindhoven Center for Innovation Studies (ECIS) 03.15, Eindhoven Center for Innovation Studies (ECIS).
  8. Koen Frenken, 2006. "Technological innovation and complexity theory," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(2), pages 137-155.
  9. Andreas Pyka & Nigel Gilbert & Petra Ahrweiler, 2006. "Simulating Knowledge-Generation and -Distribution Processes in Innovation Collaborations and Networks," Discussion Paper Series, Universitaet Augsburg, Institute for Economics 287, Universitaet Augsburg, Institute for Economics.
  10. Yeaple, Stephen & Helpman, Elhanan & Melitz, Marc, 2004. "Export versus FDI with Heterogeneous Firms," Scholarly Articles 3229098, Harvard University Department of Economics.
  11. Nigel Gilbert & Andreas Pyka & Petra Ahrweiler, 2001. "Innovation Networks - a Simulation Approach," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 4(3), pages 8.
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Cited by:
  1. Jackie Krafft & Francesco Quatraro & Pier-Paolo Saviotti, 2013. "The dynamics of knowledge-intensive sectors' knowledge base: Evidence from Biotechnology and Telecommunications," Working Papers, HAL hal-00991397, HAL.

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