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

Author

Listed:
  • Martin Blom

    (Norwegian Institute of International Affairs (NUPI))

  • Fulvio Castellacci

    (Norwegian Institute of International Affairs (NUPI))

  • Arne Fevolden

    (NIFU)

Abstract

The paper presents an agent-based simulation model of the European defence industry. The model resembles some of the key characteristics of the 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 export market.

Suggested Citation

  • Martin Blom & Fulvio Castellacci & Arne Fevolden, 2014. "Defence firms facing liberalization: innovation and export in an agent-based model of the defence industry," Computational and Mathematical Organization Theory, Springer, vol. 20(4), pages 430-461, December.
    • Handle: RePEc:spr:comaot:v:20:y:2014:i:4:d:10.1007_s10588-014-9173-6
    DOI: 10.1007/s10588-014-9173-6
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    More about this item

    Keywords

    Defence industry; Liberalization; EU; Export; Innovation; Agent-based simulation model;
    All these keywords.

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • F1 - International Economics - - Trade
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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