Concentration in the International Arms Industry¤

John Dunne (), Maria Garcia Alonso, Paul Levine () and Ronald Smith ()
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Maria Garcia Alonso: University of Kent
Authors registered in the RePEc Author Service: Maria del Carmen Garcia-Alonso

No 301, Discussion Papers from University of the West of England, Department of Economics

Abstract: 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.

Keywords: market structure; arms industry; procurement (search for similar items in EconPapers)
JEL-codes: F12 H56 L10 (search for similar items in EconPapers)
Date: 2003-01
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Persistent link: http://EconPapers.repec.org/RePEc:uwe:wpaper:0301

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