 Targeting profits: The economic impact of arms embargoes on defense companiesJeroen Klomp Journal of Policy Modeling, 2024, vol. 46, issue 2, 391-416 Abstract: This study explores the impact of arms embargoes on the economic performance of major international defense companies. The direction of this effect is not immediately clear as it relies on the embargo evading opportunities by exporting companies on the one hand and the stringency of enforcement by the sending state on the other. The main findings in this study indicate that the total revenues of a defense company significantly drop after the introduction of an arms embargo. As a result, the net profits of these companies are under downward pressure when the number of arms embargoes increases globally. It turns out that the ability of a firm to effectively mitigate the negative consequences of an embargo is both related to firm-specific particularities, such as the degree of diversification, as well as, country differences. For instance, the negative effect appears, in particular, to be present in countries with a strong rule of law or effective control of corruption. Keywords: Defense industry; Arms embargoes; Economic performance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:46:y:2024:i:2:p:391-416 DOI: 10.1016/j.jpolmod.2024.01.012 Access Statistics for this article Journal of Policy Modeling is currently edited by A. M. Costa More articles in Journal of Policy Modeling from Elsevier |
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