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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- Mary Carmen Garcia-Alonso, 1999. "Price competition in a model of arms trade," Defence and Peace Economics, Taylor & Francis Journals, vol. 10(3), pages 273-303.
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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.
- Dunne, Paul & Hughes, Alan, 1994. "Age, Size, Growth and Survival: UK Companies in the 1980s," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 115-140, June.
- Paul Levine & Ron Smith, 2000. "Arms Export Controls and Proliferation," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(6), pages 885-895, December.
- 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.
- Ron Smith, 2001. "The International Arms Industry Since the End of the Cold War," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 2(3), pages 155-166, July.
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