EFFECTS OF MILITARY SPENDING ON THE PROFITABILITY OF SPANISH DEFENCE CONTRACTORS |
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| Authors: | Antonio Fonfría Paulina Correa‐Burrows |
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| Institution: | 1. Department of Applied Economics‐II (Industrial Economics), Complutense Institute for International Studies , Complutense University of Madrid , Spain afonfria@ccee.ucm.es;3. Department of Applied Economics II , Rey Juan Carlos University , Spain |
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| Abstract: | The traditional view of the defence industry obtaining large profits from contracts with the Ministry of Defence relies on several assumptions. Among these are the use of such arrangements as an instrument of industrial policy, the strong market power enjoyed by prime contractors, and the inefficiency encouraged by the sector. The findings show that defence contracts have a positive effect on profits, as well as the prizes for innovation and the market power enjoyed by some defence subsectors. |
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| Keywords: | Defence industry Defence procurement Profits Spain |
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