Defence firms facing liberalization: innovation and export in an agent-based model of the defence industry

Blom, Martin and Castellacci, Fulvio and Fevolden, Arne (2012): Defence firms facing liberalization: innovation and export in an agent-based model of the defence industry.

Abstract

The paper presents an agent-based simulation model of the defence industry. The model resembles some of the key characteristics of the European defence sector, and studies how firms in this market will respond to the challenges and opportunities provided by a higher degree of openness and liberalization in the future. The simulation analysis points out that European defence firms will progressively become more efficient, less dependent on public procurement and innovation policy support, and more prone to knowledge sharing and inter-firm collaborations. This firm-level dynamics will in the long-run lead to an increase in the industry’s export propensity and a less concentrated market.

• Item Type: MPRA Paper
• Language: English
• Keywords: Defence industry; liberalization; EU; export; innovation; agent-based simulation model
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling; F - International Economics > F5 - International Relations, National Security, and International Political Economy; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M2 - Business Economics; F - International Economics > F1 - Trade; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance

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