Capable Companies or Changing Markets? Explaining the Export Performance of Firms in the Defence Industry

The paper presents an analysis of the factors explaining the export performance of firms in the defence sector. We focus on the case of Norway, and make use of two complementary methodologies: the first is based on econometric firm-level data analysis for the whole population of defence companies, and the second is based on qualitative case study research on the three most important defence export products (weapon stations, ammunition and electronics). Our empirical results highlight the importance of four major success factors for exporting firms: (1) the participation in offset agreements; (2) the ability to focus on their set of core competencies; (3) their R&D activities and interactions with the public S&T system; and (4) demand opportunities and, relatedly, user-producer interactions.     

Panel Causality Analysis Between Defence Expenditure and Economic Growth in Developed Countries

There is much controversy in the literature over whether military expenditures have a positive, negative or no relation impact on economic growth. The aim of this paper is to determine the relationship between GDP and defence expenditure. The study analyses GDP and defence expenditures of the developed countries with cross-sectional ADF and SURADF unit root tests using annual data for the years 1980–2007. We conclude that in the long term, according to the Pedroni cointegration test, there exists a relationship between defence expenditure and economic growth. Furthermore, by utilizing the Granger causality test, we find that defence expenditure is a factor in economic growth. In other words, our study validates the hypothesis that defence spending by economically developed countries positively contributes to their economics.     

Book reviews

The Political Economy of Military Spending in the United States, Alex Mintz (ed), London and New York: Routledge, 1992, pp x, 334; ISBN 0–415–07595–5

Penser La Guerre, Penser L'Economie, Christian Schmidt, (Paris: Odile Jacob, 1991), 350p.

Military Production and Innovation in Spain, Jordi Molas‐Gallart, Chur (CH): Harwood Academic Publishers, 1992, pp. vii, 212; ISBN 3–7186–5280–3     

A RANDOM RATIONING MECHANISM WHICH REDUCES THE RISKS OF NO SON LEFT AT HOME

This paper empirically re‐examines the long‐run co‐movements and the causal relationships between GDP and defence expenditures in a multivariate model with real defence expenditure per capita (ME), real GDP per capita (GDP), and real capital stock per capita (K). We apply the view of the aggregate production function to construct the empirical model. Using up‐to‐date data for 27 OECD countries and 62 non‐OECD countries for the 1988–2003 period, we combine cross‐sectional and time series data to re‐investigate the relationship between GDP and ME. Previous studies using time series data may have yielded misleading results on account of the short time span of typical datasets. By contrast, we use recently developed panel unit root tests and heterogeneous panel cointegration tests, and conclude that there is fairly strong evidence in favour of the hypothesis of a long‐run equilibrium relationship between GDP and ME. The long‐run panel regression parameter results, such as the fully modified OLS, indicate that a positive relationship between GDP and ME only holds for OECD countries, whereas a negative relationship from ME to GDP only exists in non‐OECD countries under examination and in the panel as a whole. Furthermore, by implementing the dynamic panel‐based error correction model, we determine that GDP and ME lack short‐run causalities, but do show long‐run bidirectional causalities in both OECD and non‐OECD countries.     

COUNTRY SURVEY XX: DEFENCE SPENDING AND PEACEKEEPING IN URUGUAY

Uruguay is a country with a very unusual profile, since it has just 3.4 million inhabitants but is among the top ten troop contributors to the UN PKO (Peace Keeping Operations) and is the first contributor per capita. In 2002 and 2003 it was the seventh troop contributor to the UN, and by the end of 2005 it was eighth in the UN ranking. Uruguay has never had any imminent external threat to its security after its independence in 1828, and it has had no internal threat since the end of the urban guerrillas’ actions in the 1970s. The country has no defence industry, and has always had an all‐volunteer military service, which presently involves almost 1% of the total population, and about 2% of the labour force. The empirical evidence presented in this paper shows that, in the past decades, Uruguayan defence spending has been influenced mainly by internal factors, most of them of an economic nature. The high participation in PKO has not increased military expenditure and it has produced a positive impact on the country’s economy.     

EFFECTS OF MILITARY SPENDING ON THE PROFITABILITY OF SPANISH DEFENCE CONTRACTORS

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.     

Military Spending and Growth: The Role of Institutions

Recent literature on whether military spending affects economic growth argues that the relationship may be a conditional one. We add to this literature by considering the role that ‘good institutions’ play in the effect of military spending on growth. Using data from a sample of over 100 countries from 1988 to 2010, our analysis suggests that the effect of military spending on growth is generally negative or zero at best, and this effect is mitigated in the presence of good economic and political institutions.     

电力电子技术的现状与绿色变换的发展趋势

论述了电力电子技术的发展及其产生的影响 ,认为绿色变换是消除谐波污染、进一步发展绿色化电力电子技术的唯一途径 ,由此阐明了绿色变换技术的现实意义     

European defence industry consolidation and domestic procurement bias

How have European cross-border defence industrial mergers and acquisitions affected domestic procurement bias among the major EU powers? This article departs from the findings of Andrew Moravcsik more than two decades ago suggesting that major West European states had no ingrained preferences for defence industrial autarchy. When cross-national armament projects were derailed, this could be attributed to political efforts of national defence industrial champions favouring purely domestic projects. As former national champions join pan-European defence groups, their preferences are likely modified. Does this shift procurement towards non-European “off-the-shelf” solutions which, according to Moravcsik, are favoured by defence departments? Or does it give impetus to a stronger preference for European as opposed to domestic systems? In this article, procurement patterns in the aftermath of cross-border defence industry consolidation will be analysed. Procurement bias is assessed in two industry segments characterised by pervasive consolidation.