Concentration in the International Arms Industry¤
AbstractThe end of the Cold War led to a large drop in world military expenditure, rising fixed costs of developing weapons because of technological changes and a reduction of national preference for domestic weapons. Alongside these developments has been an increase in concentration in the world arms industry, which at the end of the Cold War had been very unconcentrated with concentration ratios close to the Sutton lower bound. This paper provides an empirical and theoretical analysis of this process. It examines the dynamics of the evolution of concentration and then shows that a trade model with optimal procurement decisions can capture the main features of this empirical analysis.
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Bibliographic InfoPaper provided by Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol in its series Working Papers with number 0301.
Length: 29 pages
Date of creation: Jan 2003
Date of revision:
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More information through EDIRC
market structure; arms industry; procurement;
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
- H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
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