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Competing Explanations of U.S. Defense Industry Consolidation in the 1990s and Their Policy Implications

Author

Listed:
  • Ryan R. Brady

    (United States Naval Academy)

  • Victoria A. Greenfield

    (United States Naval Academy)

Abstract

Was the consolidation of defense industry in the 1990s driven by U.S. Department of Defense (DOD) directives, or was it driven instead by the same forces that drove consolidation in many other sectors of the U.S. economy in the 1990s? To better understand the roles of DOD policy and economy-wide forces in shaping the U.S. defense industry, we test for structural breaks in defense industry and spending data and compare our findings to those relating to other sectors and the general economy. We identify structural breaks in the defense-related data in the early 1980s and throughout the 1990s, roughly consistent with changes in the U.S. economy, including broader merger trends. Overall, our results are more consistent with the view that economy-wide factors drove defense industry consolidation, largely independent of the DOD policy changes that occurred early in the 1990s.

Suggested Citation

  • Ryan R. Brady & Victoria A. Greenfield, 2009. "Competing Explanations of U.S. Defense Industry Consolidation in the 1990s and Their Policy Implications," Departmental Working Papers 22, United States Naval Academy Department of Economics.
    • Handle: RePEc:usn:usnawp:22
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    Cited by:

    1. Brady Ryan R & Stimel Derek S, 2011. "How the Housing and Financial Wealth Effects Have Changed over Time," The B.E. Journal of Macroeconomics, De Gruyter, vol. 11(1), pages 1-45, August.
    2. Florence Bouvet & Ryan Brady & Sharmila King, 2013. "Debt Contagion in Europe: A Panel-VAR Analysis," Departmental Working Papers 44, United States Naval Academy Department of Economics.
    3. Florence Bouvet & Ryan Brady & Sharmila King, 2013. "Debt Contagion in Europe: A Panel-Vector Autoregressive (VAR) Analysis," Social Sciences, MDPI, vol. 2(4), pages 1-23, December.

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    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • H0 - Public Economics - - General

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