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Is The Defence Market Contestable? The Case Of Military Aerospace


  • Cedric Laguerre


I demonstrate the existence of two sources of contestability in the military aerospace market, within producing and export countries, through the State's triple role as unique buyer, regulator and seller. For the producing countries, I introduce the new concept, 'sovereignty price'; that is, the profit a State agrees to grant to its defence firms to perpetuate their domestic activities. This subjective, evolutionary concept provides a dynamic character to the theory of contestable markets. Moreover, I show that contestability is more effective than antitrust policies and a solution of the cost disease. Empirical cases are shown to confirm the theoretical analysis.

Suggested Citation

  • Cedric Laguerre, 2009. "Is The Defence Market Contestable? The Case Of Military Aerospace," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(4), pages 303-326.
  • Handle: RePEc:taf:defpea:v:20:y:2009:i:4:p:303-326
    DOI: 10.1080/10242690802365044

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    Cited by:

    1. Dasgupta Utteeyo, 2011. "Are Entry Threats Always Credible?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-41, December.
    2. ., 2014. "Industry structure," Chapters,in: The Political Economy of Aerospace Industries, chapter 6, pages 76-116 Edward Elgar Publishing.


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