Concentration in the International Arms Industry¤
The 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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- Ron Smith, 2001. "The International Arms Industry Since the End of the Cold War," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 2(3), pages 155-166, July.
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- Benassy, Jean-Pascal, 1996. "Taste for variety and optimum production patterns in monopolistic competition," Economics Letters, Elsevier, vol. 52(1), pages 41-47, July.
- repec:cup:cbooks:9780521447287 is not listed on IDEAS
- Smith, R. P., 1990. "Defence procurement and industrial structure in the U.K," International Journal of Industrial Organization, Elsevier, vol. 8(2), pages 185-205, June.
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