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Our country is under economic and military risks due to its geopolitical position. Due to our history, it is understood that we are in a position to give importance to defence industry. When the concept of developments in defence industry is examined, it is seen that development could be provided by meeting the needs from internal or external sources. In defining the developments in the defence industry, variables such as patents and employment rate are taken as basis in the literature. One of the measurement values defining these variables is defence expenditures, and the effects of the expenditures on economic growth may be different depending on whether the defence needs are met by internal or external sources. In this study, the effects of the expenditures made for the development of the defence industry on the export-import balance, which is an important macroeconomic variable, have been investigated. In the researches carried out at different periods, it was observed that the expenditures made for the defence industry had a positive effect on the export-import balance in both short and long term as the technological level in the defence industry increased. Therefore, as the defence industry is localized, the share of imports in foreign trade volume is decreasing., Ülkemiz, jeopolitik konumu gereği ekonomik ve askerî riskler altında bulunmaktadır. Tarihçemize bakıldığında da savunma sanayine önem verilmesi gereken bir konumda olduğumuz anlaşılmaktadır. Savunma sanayinin gelişimi kavramına bakıldığında ise iç ve dış kaynaklardan ihtiyaçların karşılanması ile gelişim sağlandığı görülmektedir. Savunma sanayindeki gelişmelerin tanımlanmasında literatürde alınan patentler ve istihdam oranı gibi değişkenler temel alınmaktadır. Bu değişkenleri tanımlayan ölçüm değerlerinden biri savunma harcamaları olup harcamaların, savunma ihtiyaçlarının iç veya dış kaynaklardan karşılanması için yapılıyor olması durumuna göre ekonomik büyümeye etkileri farklı olabilmektedir. Bu çalışmada, farklı zamanlarda literatürde yer alan araştırmalar derlenerek savunma sanayinin gelişimi için yapılan harcamaların önemli bir makroekonomik değişken olan ihracat-ithalat dengesi üzerindeki etkileri araştırılmıştır. Farklı dönemlerde yapılan araştırmalarda savunma sanayi için yapılan harcamaların, savunma sanayinde teknolojik düzey arttıkça hem kısa, hem de uzun vadede ihracat-ithalat dengesinde ihracat yönünde olumlu etki yaptığı gözlenmiştir. Dolayısı ile savunma sanayi yerelleştikçe dış ticaret hacminde ithalatın payı gittikçe düşmektedir.

This paper examines the importance of closer co-operation in defence-related procurement. Led by the decision that Belgium will lead the procurement of 12 Mine CounterMeasures Vessels (MCMV), the case of a potential Belgian naval construction cluster is discussed. The feasibility of a potential cluster is investigated by looking at key elements of a successful naval construction cluster, the Dutch naval construction cluster, and comparing those key elements to the current Belgian situation. Forming a sustainable Belgian naval construction cluster will be difficult. Most of the procurement process of the MCMVs is set on a European tender. In the long run, due to the absence of both a launching customer and leader firms, no party is able to carry the cluster with investments and knowledge spill-overs. In order to keep public support for large defence-related investments, clustering around the MCMV integration system and proactive cluster support is recommended.

The usage of foreign direct investment (FDI) is a crucial element in the economic growth literature focusing on sustainable development. In the case of the aerospace sector, security consid...

The First Fundamental Theorem of Welfare Economics states that, under certain conditions, markets are able to supply goods and services in a way that is Pareto efficient. However, these stringent c...

Object of the analysis. Increasing defence expenditures bring back a discussion weather the national defence industry is necessary to sustain economic welfare of a country, boosts innovations and enhances own military sector. Investigation problem. The use of political economy theories in that case could facilitate further research steps and guide scientists that will look for a precise answer to this issue. The aim of this manuscript is to review political economy theories that can be used in defining defence industry as such, and consider practical applicability options of different methodological approaches in the context of defence industry. To reach this aim, following objectives were designed: 1. Describe political economy phenomena and define its evolution; 2. Evaluate traditions of political economy and define their practical significance; 3. Assess methods used in actual analysis of defence industry and define the main findings. Research methods. While writing this article, the comparative literature analysis method was used. The famous scientists such as R. Abdelal, C., Adam, S. Dercon, G. Agostino, J. P. Dunne, L. Pieroni, M. Blyth, G. Browning, A. Kilmister, J. P. Dunne, E. Skons, D. Braddon, A. Gilpin, A. Goldstein, R. Jacson, G. Sorensen, S. Jevons, R. O. Keohane, C. W. Mitchell, I. D. Salavrakos, A. Sen and R. M. Smith were cited and referenced. All used literature is referenced. This article is structured into two big parts. The first part is devoted to the analysis of political economy subject itself and its approaches towards empirical research. The second part is designed to reveal possible application options of different theoretical political economy approaches in the context of defence industry. Outcomes and conclusions. In the context of current analysis of different political economy theories, different approaches on methodology, analytical side, linkage with defence industry, defence spending and possible insights about investigation possibilities the following conclusions were found: Political economy that originated in the XVII–XVIIIth century and currently is adopting different theoretical approaches in most cases is still relying on “grand” theories such as realism (mercantilism), liberalism, and Marxism. The existing variety of research methodologies and tools suggests the “correct” way to examine features of situation based on selected theory. Researches should be aware that even a proper methodology does not guaranty the reliability of research results due to the complexity of political economy subject itself and its interdependency to both political and economic science features. There are different scholars explaining trends and proposing different theoretical approaches to analyse defence sector and its connections (influence) with state. Current dynamics of defence industry led to renewed debates over whether the increase of the military expenditure enhances or deteriorates economic growth and welfare of the state. There have been numerous studies done in defining military expenditure (also research and development programs in the military sector) impact on local and state economies. Regardless of different methodologies used (econometric analyses, macro econometric models, time series models, demand side model, supply side model, cross-country correlation analyses and historical case study) there was no strong evidence that military expenditure is likely to have the negative economic effects on states. Keywords: political economy, defence industry, military expenditure, defence.

The debate over the benefits and drawbacks of defence industrialisation, particularly for emerging states, is far from settled but, as the case studies in this symposium suggest, a growing number of these states are taking steps to advance their defence industrial capabilities. In this volume, we attempt to decipher the reasons why states make that choice and why they choose to adopt a particular defence industrial policy.

This article surveys the body of available evidence regarding the spill-over effects of defence RD the barriers that impede or block such a process; potential negative repercussions, and the measure of such effects. The main conclusion is that the uncertainty of these effects, and the inaccurate appraisal of their value, hardly supports informed decisions concerning defence R&D policies.

Defence industrial policy – a sound security strategy or an economic fallacy? Arne Martin Fevolden and Kari Tvetbraten Defence Studies Vol. 16 , Iss. 2,2016

This study explores the effect of the Paris terrorist attacks on the stock returns and the volatility for the most important companies in the global defence industry. To this end, it employs the General Autoregressive Conditional Heteroscedasticity methodology. The findings clearly indicate that this terrorist event has a positive impact on both the returns and the volatility of these stocks.

Savunma harcamalarının ekonomik değişkenlere etkisi önemli bir çalışma alanıdır. Bu çalışma Türkiye'nin savunma sanayi, savunma harcamaları ve istihdam ilişkisini 1980-2016 dönemi için analiz etmek amacıyla yapılmıştır. Savunma harcamalarında yıllar itibariyle oluşan değişiklikler yapılan harcamaların tartışma konusu olmasına neden olmuştur. Devletlerin varlığını sürdürmek için gerekli olarak gördüğü savunma harcamalarının ekonomiye olan etkileri konusunda farklı görüşler ortaya atılmıştır. Savunma harcamalarının makroekonomik değişkenleri hangi yönde etkilediği konusunda çalışmalar yapılmıştır. Literatürde savunma harcamaları ile ilgili en fazla çalışılan konu savunma harcamaları ve ekonomik büyüme ilişkisi olmuştur. Savunma harcamaları ve istihdam ilişkisi konusunda ise az sayıda çalışma bulunmaktadır. Bu çalışmada ilk olarak savunma sanayi, savunma harcamaları ve istihdam kavramları açıklanmış ve Türkiye için genel durum değerlendirilmiştir. VAR modeli yöntemi kullanılarak etki tepki analizi ve varyans ayrıştırması metodu ile savunma harcamaları ve istihdam ilişkisi değerlendirilmiştir. Bu çalışmada savunma harcamalarının istihdamı negatif olarak etkilediği sonucuna ulaşılmıştır. The impact of defense spending on economic variables is an important area of work. This study aims to examine the relationship between defense industry, defense expenditures and employment in Turkey for the period of 1980-2016. The increase in defense spending has raised a debate for the expenditures made. Different opinions emerged regarding the impacts of defense expenditures on the economy, which states see as necessary to maintain their presence. Studies have been conducted on how defense expenditures affects macroeconomic variable. In this field, the relationship between defense expenditures and economic growth is the subject that has been studied the most. However, there are few studies on the relationship between defense expenditures and employment. In this paper, firstly, the terms of defense expenditure and employment were explained, followed by an overall assessment of the situation in Turkey. The relationship between defense expenditures and employment was evaluated through action-reaction analysis and variance separation using Vector Autoregressive (VAR) Model. In this study, it was found that the increase in defense spending has negative impact on employment. 78

Günümüzde pek çok dünya ülkesi gelirlerinde savunma harcamalarının payı oldukça büyüktür. Bu durum savunma sanayi gelişmiş, üretici ülkeler için olumlu sonuçlar doğururken, savunma sanayinde dışa bağımlı ithalatçı konumundaki ülkeler için ise uzun dönemde büyük ekonomik sorunlar doğurabilmektedir. Çalışmada Türkiye'de savunma sanayi ARGE harcamalarının reel hâsıla ve cari işlemler dengesi ürerindeki etkileri araştırılmaktadır. Çalışma sonucunda savunma sanayi üretim harcamalarını temsilen savunma sanayi Ar-Ge harcamalarının reel hasılayı etkilemediği ancak cari açığı olumlu etkilediği sonucuna ulaşılmıştır. In many countries of the world today, the share of defense spending on their income is quite large. While this situation has produced positive results for the defense industry and the producer countries, for the countries that are dependent on foreign importers in the defense industry, it can create big economic problems in the long run. The effects of the R&D spending of the defense industry in Turkey on the real GDP and the current acount balance is analyzed in the study. As a result of the study, as an indicator of defense industry production expenditures, defense industry R & D expenditures do not affect real GDP, but the current deficit is positively affected. 191

Ülkeler en temelde refah düzeylerini arttırarak ekonomik olarak kalkınmak ister. Bunun yolu da güçlü bir sanayi yapılanmasından geçer. Sanayileşme ülkelerin refah düzeyinin artması ve ekonomik bağımsızlığın kazanılmasında önemli bir paya sahiptir. Sanayileşme kalkınmanın ölçüsü olarak kabul edilmektedir. Gelişmiş birçok ülkenin gelişmişliğinin temelinde savunma sanayinin önemli bir etkisi vardır. Savunma sanayinin ekonomide yarattığı canlandırıcı ve uyarıcı etki ekonomik kalkınmanın ve teknolojik gelişmenin motor gücü olarak kabul edilmektedir. Savunma sanayi sektörünün ileri teknolojiler gerektirerek bilgi birikimini arttırması ileri teknolojilerin gelişimine olanak sağlar. Üretilen teknoloji diğer sektörlerin gelişimini sağlayarak ekonomik kalkınmayı hızlandırmaktadır. Bugün birçok gelişmiş ülke silahtan savunma sistemlerindeki yazılımlara dek çok çeşitli ürünlerin üretimini yaparak uluslararası platformda söz sahibi olmak ister.Türkiye Cumhuriyeti, kuruluşundan bu yana kalkınmanın gerekliliği olarak sanayileşme çabalarını devam ettirmiş ve bu süreç içerisinde köklü değişimlerin yaşandığı birçok farklı dönemden geçmiştir. Çalışmada Türkiye'nin sanayileşme sürecinde savunma sanayinin etkisi ve rolü araştırılmıştır. Türkiye'nin sanayileşme süreci dönem dönem ele alınmış ve dönemler ele alınırken kronolojik akışı etkileyecek parametreler üzerinde ayrıca durulmuştur. Çalışmada çeşitli firma yöneticileri ve firmaların faaliyet raporları sonucuna dayanılarak SWOT Analizi yapılmış ve sanayileşme sürecinde savunma sanayinin etkisi araştırılmıştır. Çalışma sonucunda Türkiye'nin sanayileşme sürecinde savunma sanayinin sanayileşmeyi olumlu etkilediği sonucuna ulaşılmıştır. Çalışma sayısal veriler ve tablolar ile desteklenmiştir. Countries want to grow economically by increasing their prosperity levels. The way of this development is going through a strong industrial structure. Industrialization has an important share in increasing the welfare level of countries and gaining economic independence. Industrialization is regarded as the measure of development. The defense industry has a significant impact on the basis of the development of many developed countries. The revitalizing and stimulating effect of the defense industry on the economy is regarded as the engine power of economic development and technological development. That the defense industry needs advanced technology, enables the development of advanced technology by increasing knowledge accumulation. The produced technology will accelerate the economic development by providing the development of the other sectors. Today, many developed countries want to have a say in international platforms by producing a wide range of products, ranging from weapon to software in defense systems.The Republic of Turkey has continued its development as the necessity of industrialization efforts since the establishment and it has passed through many different periods during which deep rooted changes have taken place. In this study, the impact and role of the defense industry in the industrialization process of Turkey was investigated. The industrialization process of Turkey has been discussed in the period and the parameters that will affect the chronological flow have been discussed in the period. In this study, SWOT analysis was made based on the results of various firm managers and firms' annual reports and the impact of the defense industry in the industrialization process was investigated. As a result of the study, it was concluded that the defense industry positively affected industrialization in the industrialization process of Turkey. The study is supported by numerical data and tables. 152

XX. yüzyılda yaşanan iki dünya savaşı ve devamında doksanlı yılların sonuna kadar dünya kamuoyunu meşgul eden Soğuk Savaş dönemi, bir sonraki yüzyılda yerini 11 Eylül sonrasında gözlenen yeni bir kutuplaşmaya bırakmıştır. Dünya genelinde ortaya çıkan bu durum kadar, Türkiye'nin sahip olduğu jeopolitik konum da siyasi ve askeri huzursuzluğun zaman zaman tırmandığı bir tablo çizmektedir. Ülkeler, güvenlik bakımından gittikçe daha karmaşık hale gelen bu ortamda, kendi egemenlik hakları ile vatandaşlarının can ve mal emniyetini sağlayabilmek adına savunma yatırımlarını artırmaktadır ve bu durum, ekonominin diğer bileşenleri üzerinde farklı etkiler doğurmaktadır. Savunma harcamalarının zorunlu olarak artmaya devam edeceği göz önünde bulundurularak, gelişmiş ülkelerin savunma sanayii alanında elde ettikleri yenilikleri ekonomik güce dönüştürmeleri, bu harcamalarının ekonomi üzerindeki muhtemel negatif etkilerini de ortadan kaldırmaya yönelik önemli bir avantaj oluşturmaktadır. Bu avantaj, sadece ekonomi ile ilişkili değil, aynı zamanda ülkelerin temel güç dengeleriyle de alakalıdır. Bu bağlamda; Türk Savunma Sanayii son yıllarda önemli üretim hamleleri gerçekleştirmiş, işbirliği içerisinde olduğu yan sektörlerle beraber güçlü bir yapılanma yoluna girmiştir. Bu çalışmada, savunma harcamalarının tarihsel yapısı ve gelişimi üzerinde durularak, savunma sektöründeki harcamalarının ülke ekonomisi üzerindeki etkisi incelenmiştir., The two world wars that took place in the 20th century and the "Cold War" period after that which occupied the world public opinion until the end of 1990s has left its place to the next centuries' new polarization which came with the 11 September events. As much as this case affecting the whole world, Turkey's geopolitical position too, have revealed a new circumstance where political and militaristic discomfort escalated from time to time. In such an environment where security concerns have become much sophisticated, in order to secure its own sovereign rights and its nations life and property safety, countries have increased their defense investment and this brought forth the different effects on the economy's other components. For developed countries, bearing in mind that defense expenditures were obliged to increase, their gained innovations from the defense industry converted into economic power which in return have become a competitive advantage erasing the probable negative effects on the economy. This advantage is not only related to economical benefits but also is important for the essential power balance. In this respect, Turkish Defense Industry in the recent years has achieved significant production breakthroughs and has formed a strong structuring with its associated subsectors. In this study emphasizing the historical construction and the development of the defense spending, examining the effects of defense expenditures on economic data in empirical and theoretical analysis and starting with the Turkish Defense Industry's improvement these facts were discussed in Turkey's core.

This article reviews innovation processes in defence. It analyses the way and the context under which these processes are carried out. The article covers the features of defence goods with impact on innovation, the development of a new good, the institutional arrangements that support these processes and the effect of innovation on industrial market. The analysis helps to identify the causes of facts observed in practice, such as poor performance in terms of product quality, cost or delivery time, as well as to assess potential remedies. Some policy implications, which can be derived from this analysis, are finally outlined.

High-tech firms are triggered to externally acquire and combine additional supplementary and complementary resources to develop innovative capabilities and generate new knowledge, products, and business ideas. Firms may rely on cooperation, alliances, and other interfirm ties as well as on the external acquisition of the stock of resources and capabilities to foster their innovativeness and support their patent activity. This contribution develops and tests a conceptual framework for assessing external sources of a firm’s innovative performance in high-tech industries. By simultaneously evaluating the explanatory power of technological alliances and financial resources in shaping a firm’s innovative performance, measured as new patents registered, the paper provides some original outcomes from both conceptual and methodological perspectives. Research hypotheses are tested performing ordinary least squares (OLS) regression models on 90 European-listed firms operating in the aerospace and defence industry, engaging over 1,300 technological alliances within the 2007‐2011 timeframe. The findings demonstrate that high-tech firms leverage on technological supplementary alliances to innovate and to create new knowledge embodied in artifacts such as patents. In addition, financial slack is proved to be a prerequisite for a successful patent activity in high-tech industries. Empirical outcomes, discriminating between small and large firms, bring valuable insights both for academics and practitioners.

In the present paper, reasons for the increased interest in industrial policy in both developed and developing countries are explained. The systematisation of the results of the development of Russian industry from 1989 to 2014 showed a lack of systematic selection of its priorities, preventing the formation of a strategic vector of industrial policy. The target diversity of the industrial policy is established at the different economic development stages of the country. In the context of economic sanctions against Russia, it is shown that the emergence of a new industrial policy vector is connected to the need for import substitution and concomitant changes in the development model of the domestic economy. The dynamics and characteristics of the industrial development area are shown by the example of a highly developed region like the Central Urals. The total level of organisational innovation activity continues to be low and composes only 12%, although in the manufacturing sector this index is higher than the regional economy index by four absolute percentage points. The industrial policy of the Central Urals is analysed and innovation drivers of the industrial sector of the regional economy are established. The possibilities of the defence, civil engineering, mining, chemical/pharmaceutical and forestry complexes of the Sverdlovsk Region to implement its import substitution policy are explained. The most significant investment projects that will reduce the import dependence of the regional economy are presented. The possibilities of the research sector and created innovation infrastructure of the region in solving this problem are shown. It is necessary to develop the regional laws on the elaboration of industrial policy according to the basic regulations of the Federal Law “On Industrial Policy in the Russian Federation.” This article has been prepared with the support of the Russian Humanitarian Science Foundation Grant 14-02-00331 «Innovative and technological development of the region: assessment, forecasting and ways of achievement.»

The study on which this article is based, aimed to map out and analyse the ways in which Sweden’s Gripen exports have been shaped and sustained since the end of the Cold War. It did so by examining three interrelated factors that have had an effect on Sweden’s defence industry. By illustrating how societal preferences, defence and security policy shifts, and the role of national identity have influenced weapons manufacturing and exports, this article provides a balanced overview of the most salient push and pull factors of Sweden’s Gripen exports. The central contention of the study was that Swedish weapons manufacturing and exports often involve a close interaction between interests and ideals. Moreover, due to the multitude of richly correlated, interconnected and mutually reinforcing elements related to such practices, there cannot be a neat and parsimonious distinction between agents and structures and domestic and international settings. Instead, the study was especially reflective of real-world practices and the strategic relational approach between those forces that shape and sustain Sweden’s Gripen exports.

As with other aspects, the element of meeting the needs of national defence and security becomes very crucial aspect. These elements are not only coming from the domestic, but also related to the system of inter-state relations. To ensure the creation of the defence system and optimal security, policy will require minimum essential forces (MEF), which will outline the major components of the minimum requirements of national defence should be prepared to face any threats. The fulfilment of MEF must also provide welfare impacts for the region. For this reason this study was conducted with the purpose of calculating the impact of compliance with the MEF on the welfare of the region, especially in West Java province. IRIO using spatial approach, it can be concluded that the domestic defence industry is projected to have a role that is quite high, especially for the regional economy. To the West Java region, industrial goods of metal, in which there is the defence industry, encourage the creation of outputs and increase the income of workers. Although most of the economy and its impact enjoyed by workers in the territory, region or other provinces also continue to enjoy the effects of the increase in output and labour income.

Ülkelerin devamlılığı için savunma sanayinin önemi yadsınamaz. Ülkelerin gücü, savunma sektörünün güçlü olmasına bağlıdır, savunma sektörünün güçlü olması da savunmaya ayrılan bütçe ve yatırımlarla doğru orantılıdır. Savunma sanayi harcamalarının gerekliliği ve ayrılacak bütçe miktarı tüm devletlerde tartışma konusu olmuştur. Savunma sanayi harcamalarına ayrılan bütçenin ülkenin eğitim, sağlık gibi alanlarında kullanılmak yerine silahlanmaya ayrılması ekonomistler tarafından da her dönem irdelenmiştir. Savunma sanayine yapılan yatırımlar başlangıçta ülkelerin bütçesinde başlangıçta negatif bir etki yapsa da, orta ve uzun vadede hem teknolojik ilerleme sağlaması hem de dışa bağımlılığı azaltması nedeniyle bu etki pozitife dönüp dönmediği araştırılmıştır.Türkiye'de ve dünyada savunma sanayi harcamalarının ülkelerin ekonomilerine etkilerinin incelendiği bu çalışmada, özellikle Türkiye'de savunma sanayinin ithalatı, ihracatı ve cari dengesi incelenmiştir. Savunma sanayide verilen cari fazlanın, Türkiye'nin cari dengesine, büyümesine, istihdamına ve offset uygulamalarına olan etkisi ele alınmıştır. Bu hesaplama yapılırken Savunma Sanayi Müsteşarlığı, Savunma ve Havacılık Sanayii İmalatçılar Derneği, Türkiye İstatistik Kurumu, Türkiye Odalar ve Borsalar Birliği gibi kurumların geçmiş yıllara ait istatistiki verilerinden faydalanılmıştır. İncelenen veriler ışığında savunma sanayinin gelişiminin ülke ihracatına ve dolayısıyla cari dengesine yaptığı katkılar ortaya konulmuştur.Anahtar Kelimeler: Savunma Sanayi, Cari Denge, Savunma Harcamaları The defence industry is very important for the persistence of countries. The power of the countries depends of the power of defence sector and the power of defence sector depends on the budget allocated for defence. The budget amount that is allocated for the defence industry has always been a subject of arguement in the countries. Economists has always made researches about the effects of the spendings on defence. They have searched whether these spendings have positive or negative effects on the economy regarding their effects on the technological development and the decrease in dependance on foreign sources. With the increase of the investments to the defence industry in Turkey, an increase in the exportation of defence industry and a decrease in the importation of defence industry are observed. In other words, defence industry is on current account surplus. In this research the effects of current account surplus of defence industry to Turkey's economy is observed. The effects of current account surplus of defence industry to Turkey's current account balance, growth, employement and offset are covered. The data are taken from Undersecretariat for Defence Industries, Defence and Aerospace Industry Manufacturers Association, Turkish Statistical Institute, The Union of Chambers and Commodity Exchange of Turkey archives. With these data, the contrubition of the development of the defence industry to the exportation and so the current account balance is introduced. Keywords: Defense Industry, Current Account Balance, Defense Expenditures 86

Dünya üzerinde devletler resmi olarak kurulduklarından bu zamana kadar birbirleri ile sürekli mücadele halinde olmuşlardır. İlk ateşli silahların kullanılmasından sonra ülkeler bu güce sahip olmayı hedeflemişler ve bu alanda çalışmaya başlamışlardır. Ülkelerin büyümeleri başka toprakları istila etmeleri ve kendilerine kaynak aramaları ülkeler arasında savaş durumlarının olmasına neden olmuştur. Dönem dönem farklı coğrafyalarda meydana gelen savaşlar 1. Dünya Savaşı ile tüm dünyada etkisini göstermiştir. 1. Dünya Savaşı'nda ülkelerin savunma sanayisine verdikleri önem, savaşın kazanan devletlerde açıkça görülmektedir. 1. Dünya Savaşından sonra ülkeler, kendilerini korumak ve gelecekte meydana gelecek olan bir savaşa hazırlıklı olma adına savunma sanayilerini arttırma çabasına girmişlerdir. Aradan çok uzun bir zaman geçmeden ortaya çıkan 2. Dünya Savaşı ise savunma teknolojisinin daha fazla arttığı bir dönem olarak görülmektedir. Amerika Birleşik Devletleri'nin, 2. Dünya Savaşı sırasında Atom Bombası kullanması ise savunma sanayisinde meydana gelen ilerlemeyi tüm dünyaya göstermiştir.Yapılan bu tezde askeri harcamaların ekonomik boyutu ele alınarak ekonomik büyüme üzerindeki etkileri incelenecektir. Bunun için Almanya, İtalya, Güney Kore ve Türkiye'nin savunmaya yönelik gerçekleştirdiği harcamaların ekonomik büyüme üzerine etkileri analiz edilmiştir. Analiz sonucunda savunma harcamalarının ekonomik gelişim üzerine pozitif yönlü bir etkisinin olmadığı görülmüştür. ANAHTAR KELİMELER: Askeri Harcamalar, Ekonomik Büyüme Since the states were officially established on the earth, they have been in constant struggle with each other until this time. The countries since the first use of firearms, they have aimed to have this power and they have begun to work on this field. Growth of countries has invaded other lands, and calls for resources have led to war situations between countries. The wars that took place in different geographies of the period were influenced by First World War all over the world. The importance given by the countries to the defense industry during First World War is evident in the winning states of war. The countries after the First World War, they have tried to increase defense industries in order to protect themselves and prepare themselves for a future war. The second World War, which had not come a long time ago, is seen as a period in which defense technology has increased even more. The use of the Atomic Bomb by the United States during second World War has shown the world progress in the defense industry.This thesis deals with the economic dimension of military expenditures. This will economic growth examines the impact of military spending on the determinants. An analysis was made for the countries which are the leading for this defense expenditures Germany, İtaly,South Korea, and Turkey. As a result of the analysis, it is argued what importance to give importance to military defense and defense industry has had in the name of economic growth.KEY WORDS: Millitary expentiture, Economic Growth, 149

While many have noted that EU member states have different preferences over the prospect of an integrated EU defence, analyses that specifically explore state-industry relations in the definition of EU defence-industrial issues, and in the evolution of the Common Security and Defence Policy in general, are lacking. This is surprising, given that different configurations of government-industry relations have represented a persistent impediment to European defence-industrial cross-border collaboration. This article investigates how state-defence industry relations impact on member states' preferences towards the EU defence-industrial framework. Based on the case studies of the interaction of France and the UK with the European Defence Agency, this analysis focuses on the difference between public and private defence firms' governance settings as the crucial explanatory variable accounting for diverging member states' preferences in this domain.

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.

This study analyses the performance of the productivity of the main industrial subsectors composing the security and defence technological and industrial base (SDTIB) in Spain from 1996 to 2009. Accordingly, we have used the non-parametric data envelopment analysis and bootstrapping techniques to compute Malmquist productivity indexes that allow us to split productivity growth into efficiency change and technical progress. The results obtained show productivity improvement in the SDTIB as a whole due mainly to advances in technology and to a lesser extent to the contribution of technical efficiency. The bootstrap approach yields further evidence, as for many cases, productivity growth or decline, is not statistically significant. This is the first time a study of this kind has been carried out on the production process of this sector in Spain.

The trend of ever-decreasing national defence budgets poses many worrying questions for companies in the global defence industry and may soon require them to make significant decisions about their respective future strategies. In this article, Henrik Heidenkamp, John Louth and Trevor Taylor explore the various strategic options available to defence companies in the UK and abroad, and consider the centrality of governments in ensuring the long-term sustainability of what is deemed to be an industry crucial to national security.

Finmeccanica is the eighth largest arms manufacturer on a world scale. The article explains and discusses its recent evolution. In particular, we discuss the broader privatisation programme implemented by the government as a response to the 1992 financial crisis. Finally, we will present our conclusions on how the interplay of domestic factors and external pressures accounts for Finmeccanica’s peculiar trends. This result, especially Finmeccanica’s performance, is the consequence of a deep transformation occurred in the past 10–15 years in both the industrial base and national defence policy. The two processes appear to be somehow interrelated.

This paper deals with the project of a merger between BAE systems and EADS, announced in September 2012 and finally cancelled one month later. It investigates the rationale of the merger project and the reasons that explain its collapse. Our first aim is to assess the importance - usually put forward in the literature - of the pre-merger phase in the success or the failure of a merger project. Our second aim is to put forward the specificities of mergers when defence firms are involved. Using a single case study methodology, we show that the economic rationality of the project was based on industrial complementaries, economic synergies and personal motives. We then investigate the many political divergences, specific to the defence industry, which emerged during the pre-merger phase. Finally, the paper draws on the implications of the failure of the merger project.JEL Codes: L10, L64, G34

Türkiye, ekonomik kalkınma ve yüksek düzeyli savunma harcamaları ikilemi ile karşı karşıya bulunmaktadır. Türkiye'nin ekonomik kalkınması için iktisadi kaynaklarını etkin bir şekilde kullanması gerekirken, karşı karşıya bulunduğu koşullar, savunma harcamalarını azaltmasına fırsat vermemektedir. Bu tezin amacı, 1980-2013 dönemine ait yıllık verileri kullanarak Türkiye'de savunma harcamalarının ekonomik büyümeye etkisini analiz etmektir. Literatürde savunma harcamalarının ekonomik büyümeye etkisi hakkında yapılan çalışmalar incelenmiş ve fikir birliğine varılamamıştır. Çalışmada zaman serisi analizi kullanılmıştır. Zaman serisi analizi, Johansen Eşbütünleşme ve Hata Düzeltme Modeli tekniklerine dayanmaktadır. Türkiye ekonomisi verilerinden elde edilen bulgular, uzun dönemde savunma harcamaları ile büyüme arasında ilişkinin var olduğunu göstermiştir. Analize göre savunma harcamaları büyümeyi negatif olarak etkilemektedir. Anahtar Kelimeler: Savunma Harcamaları, Ekonomik Büyüme, Johansen Eşbütünleşme, Hata Düzeltme Modeli Turkey is faced with the dilemma economic development and high level defense spending. While Turkey is supposed to use their economic resources for economic development effectively, conditions which are faced with, does not give the opportunity to reduce defense spending.The aim of this thesis is to analyze the effect of defense spending on economic growth by using annual data for the period 1980-2013 in Turkey. The various studies in the literature in terms of the relationship between defense spending and economic growth are examined and it is concluded that there is no consensus as to the existence of the relationship between them. In this study, time series analysis was used. The time series analysis is based on Johansen Cointegration Analyse and Error Correction Model techniques. The findings obtained from economic data of Turkey suggest that there is a relationship between defense spending and economic growth indicators in the long period. According to the analyse, in Turkey, defense spending has a negative effect an economic growth. Keywords: Defense Spending, Economic Growth, Johansen Cointegration, Error Correction Model 161

The defence industries of the Western world are facing greater challenges than at any time since the end of the Cold War. Military equipment spending across the old markets of Europe and the US are now set on the downward trajectory triggered by the worldwide financial crisis, with predictable consequences for armed forces and the corporations that support them.

Since the start of market reforms, enterprises of the Russian military–industrial complex have lived through a massive crisis and a spectacular revival. Using original data from a longitudinal survey covering the period of 1995–2006, this article analyses the impact of transformation in the defence industry on labour and labour–management relations. We find that by the mid-2000s defence enterprises were largely able to stop job losses, eliminate wage arrears and restore wages to the level prevailing in the civilian economy. The study confirms that compared to other sectors of the Russian economy, defence enterprises continue to carry a strong legacy of the Soviet system. The dominant role of state ownership and government orders, along with the relative geographical isolation of defence enterprises and obvious factors of secrecy and security, made labour at these enterprises less willing to challenge management or owners by strikes and open protests. On the other hand, workers of defence enterpri...

Defence offsets rank as one of the most important and controversial topics within the broad field of defence economics. Arms vendors are likely to view offsetting investment as a distraction, fearful of its potential to hurt the bottom line. By contrast, policymakers in the arms purchasing countries see offsets as an opportunity to extract technology transfer, as well as employment, investment and export sales opportunities. Establishing the actual impact of offsets, however, is not easy. The subject is shrouded in secrecy and myth, with anecdote and generalisation pervading even the intellectual press. This paper seeks to break the mould by offering an empirical case study of the role of offsets in Malaysian defence industrialisation.

Although India has established a formal mechanism for implementation of the defence offset policy, the structure and procedures lack the thrust to fulfil the objective of energizing the Indian defence industry. Besides, the policy is not supported by the existing Foreign Direct Investment (FDI) and licensing policies. While evidence suggests that domestic industry can absorb offsets, what India needs is an effective body to handle offsets, liberal FDI and licensing policies, and a better banking provision. Also there is a need for a clear roadmap for transfer of technology through offsets, keeping in view India's long-term military industrial objectives.

Bu çalışmada, 2009-2013 yıllarına ait verilerle toplam 21 ülkenin savunma sanayisinin etkinlik analizi yapılmıştır. Çalışmada, Dünya Bankası ve SIPRI veri tabanından istifade ile girdi değişkeni olarak GSYİH, savunma sanayi harcamaları, savunma sanayi istihdamı, savunma sanayi ithalatı, lojistik faktör endeksi; çıktı değişkeni olarak da savunma sanayi toplam satışları, savunma sanayi ihracatı ve savunma sanayinde elde edilen kar olmak üzere toplam sekiz değişken kullanılmıştır. Analiz yöntemi olarak, statik ve dinamik Veri Zarflama Analizi (VZA)'nin girdi ve çıktıya yönelik modelleri kullanılmıştır. Çalışmada statik VZA'nın CCR modelinden elde edilen bulgulara göre; bu beş yıllık dönemde ABD, İngiltere, Fransa, Almanya, Rusya, İspanya, İsrail, Güney Kore, Hindistan, Norveç, İsveç ve Hollanda'nın tüm yıllarda tam etkinlik düzeyinde olduğu; fakat İtalya, Türkiye, Brezilya, Avustralya, Polonya ve Singapur'un ise bu beş yıllık dönemde hep etkinlik sınırının altında kaldığı gözlenmiştir. Ayrıca Kanada, Finlandiya ve İsviçre'nin ise bu beş yıllık dönemde bazı yıllarda tam etkin olduğu, bazı yıllarda ise etkinlik sınırının altında kaldığı gözlenmiştir. Tüm ülkelere yönelik elde edilen bulgulara göre; çıktı bazında en çok ihracatın, girdi bazında ise ithalatın iyileştirilme ihtiyacı içinde olduğu gözlenmiştir. Girdi ve çıktı değişkenlerinde ortaya çıkan iyileştirme oranları birlikte değerlendirildiğinde; ülkelerin çıktı değişkenlerine kıyasla, girdi değişkenlerini daha etkin kullandıkları gözlenmiştir. In this study, an efficiency analysis for the 21 defense industries was conducted with the 2009-2013 years data. GDP, defense expenditures, employment in defense industry, import for defense industry and logistic performance index were used as input variables; total sales of defense industry, export of defense industry and profit of defense industry were also used as output variables in accordance with the data acquired from World Bank (WB) and SIPRI. In this study both statical and dynamic DEA were applied to data with input and output oriented models. According to research findings; USA, United Kingdom, France, Germany, Russia, Spain, İsrail, Korea (South), Indıa, Norway, Sweden and Netherlands were observed as efficient countries in all years; whereas Italy, Turkey, Brazil, Australia, Poland and Singapore were observed inefficient in all years. Additionaly, Canada, Finland and Switzerland were observed in some years as efficient and the others inefficient. According to findings covering all countries' improvement values; exports and imports variables were required to be improved. Comparing the improvement ratios of all variables as a whole, it was seen that input variables of all countries were used much more efficient than output variables. 356

Monopoly is a particular problem in markets where experience goods are traded, since the consumer cannot respond to bad experiences by switching repeat purchases to another supplier. New evidence shows how the defence ministry as buyer in the Soviet market for military goods responded to this problem by investing in an evaluation of quality prior to purchase, by showing reluctance to buy, and by exploiting the available non-market means to influence the defence industry as supplier. The effectiveness of these stratagems was limited by the defence industry's counteractions and because the buyer had no choice but to come to a compromise with the supplier. \ud

Significant changes have been witnessed in major centres of military production in recent times. Since the end of the Cold War, indicators of military production – expenditure, R&D expenditure, demand and supply of weaponry, and others – have shown fluctuations. Military efforts of States decelerated for nearly a decade, only to rise again since the late 1990s. The changing international security scenario has necessitated such changes, to which major centres of military production have responded in many ways – efforts towards concentration, diversification, conversion and privatisation are some of the objectives that the States have strived to achieve in their defence industrial strategies. In this context, as major centres of military production, the European States have faced many challenges. A strikingly difficult task in their case has been the search of a viable unity in political and strategic terms, which could shape the defence industry, among others, to their aspirations. This paper argues that while trends in European defence industries are moving in different directions, it is the future political shape of the Union that could be the driving force. It argues that the ‘muddle through’ scenario is likely to continue for some more time amidst two opposite contemporary trends – a common European defence industrial base and a trans-Atlantic defence industry.

This paper presents evidence on the relationship between collaboration and firm size derived from an empirical study of the UK defence industry. The results indicate that size has a positive impact on collaboration and, in particular, with the propensity to collaborate with overseas firms. However, size has no impact on the propensity to collaborate with UK partners. This lends support to theories which emphasize the resource constraints facing small firms in developing international collaboration. There is a need for a policy debate concerning mechanisms to promote collaboration to assist small firms to realise the benefits of international collaboration.

Recent research suggests that the economic benefits to the UK economy from arms exports might not be that great. Surveys suggest that almost two-thirds of those that lose their job in the defence industry either retire or find new work within one year and arms exports are heavily subsidized by the UK government. Thus any cut in such exports would reduce the annual subsidy payable by the British taxpayer. However, in addition to the direct economic benefits from defence exports there might be indirect effects. Hartley and Hooper (Does trade follow the flag? A study of the UK trade and security policy, Centre for Defence Economics, University of York, 1998) considered whether UK arms exports might lead to higher civil exports. This paper examines this hypothesis. It estimates import demand functions for three countries (Indonesia, Saudi Arabia and South Korea) and for the world as a whole over the period 1970–1997. The results suggest that UK arms exports do not stimulate UK civil exports.

This paper investigates the budgetary trade-off structure of security (defence+internal security) expenditures in Turkey for the period 1983-1998. A modified version of Todaro's distributive share index of social welfare is used to quantify the impacts on the growth of primary budget expenditures of Security, Education, Health, General Administration, Infrastructure, and Social Services. We find that defence expenditures dominate overall security expenditures and are less affected in times of bottlenecks in the economy. A systematic pattern of negative budgetary trade-offs of security expenditures in terms of other components is not identified. We also analyse the expenditures of the Defence Industry Support Fund in an attempt to find the cost of the modernisation program to the economy.

The Ministry of Industry and Trade of Russia has officially published a list of enterprises operating in the Russian Defense Industry Complex (DIC), thereby making it possible to assess the key indicators of the DIC’s size which have changed insignificantly over the past six months. However, the publication itself of such data is indicative of Russia’s intention to create a transparent defense economy. Further steps are required to create and publish official statistics of contracts for and prices of defense products, disclose federal budget allocations on actual expenditures concerning the state defense order.

The present paper deals with (1) the regional experience of a severe and sudden structural change sometimes faced by regions and cities which display considerable industrial specialisation, and (2) a proactive regional economic policy response: it offers a theoretical explanation of this policy and discusses the basic philosophy behind it, the agents involved, the instruments it employs and its effects. The German state (Land) of the Free Hanseatic City of Bremen is a port and industry centre that has not only had considerable experience of industrial decline, but also of proactive industrial policy involvement. In addition, being the centre of the defence industry in northern Germany, Bremen experienced dramatic structural change due to the disarmament process that occurred during the 1990s. Bremen's industrial defence conversion approach has been widely considered as a case for further developing network forms of regional economic policy and for a managed industrial diversification strategy. It has inde...

In the last one decade, the global defence industry has undergone significant changes. It has shrunk in terms of size. It has also become more concentrated. While large companies in the leading centres are on a merger and acquisition spree, it has left medium and small companies facing severe difficulties in adjusting to the changed scenario. The demand for military equipment shows uneven trends. While the demand for high‐tech weaponry has gone up which, in turn, has attracted more money in both sales and investment in military R&D, the ‘demand for conventional military equipment has been stagnant. As the second largest military production centre in the world, the European defence industry faces a dilemma today—whether to build a common continental industrial base independent of the US or strive to become a giant Atlantic defence industry. This paper argues that while the former option makes sense for Europe, the latter, though plagued with problems in the short run, might become inevitable for E...

For the UK, defence exports provide many jobs but critics point to the morality and human rights aspects of the arms trade. Recent speeches by the foreign secretary suggest that Mr Cook is acutely aware of the trade-off between a more ethical arms export policy and jobs in the defence industry. Recent research suggests that government subsidies for arms exports cost the UK taxpayer between £228 million and £708 million per annum. However, these figures ignore the Exchequer costs of the jobs lost as a result of the reduction in arms exports. This study uses information on the expected number of job losses, and the Exchequer cost per job destroyed, to estimate the employment costs to the Exchequer associated with a one-third reduction in UK defence exports. These costs are then subtracted from the subsidy savings to derive the overall net financial saving to the taxpayer for a one-third reduction in UK arms exports.

This article confirms that public–private partnerships in the defence industry share both economic and political dimensions. Restructuring and consolidation will result in greater strategic integration and firmer links between defence companies and government. Tasks currently undertaken by independent security companies can also be performed by government intelligence and security agencies. By drawing on the knowledge of defence industry experts it is possible to provide a more comprehensive understanding of what corporate intelligence is. Corporate intelligence is establishing itself as a separate body of knowledge. Copyright © 2001 John Wiley & Sons, Ltd.

In November 1998 the cabinet announced the list of preferred suppliers for the South African National Defence Force’s (SANDF) R30 billion arms acquisition programme. This included Britain (maritime helicopters, jet trainers and light fighters), Sweden (light fighters), Germany (corvettes and submarines) and Italy (light utility helicopters). To spend so much money on arms procurement from abroad is a major blow to the local defence industry. In attempting to win public support for the R30 billion arms deal government has continually stressed the potential positive effects of the proposed industrial participation offers on investment, job creation and growth in the local-defence related industry and the national economy.

The article is devoted to the new phenomena in the market transformation of the Russian defence-industrial complex. Based on the data generated by the repeated survey of the CEOs (general directors) of defence enterprises in 1995‐99, it examines economic performance of enterprises, their conflicts with the government and efforts at internal restructuring brought about by reductions of Russia's defence spending, mass privatisation and opening up of the domestic market. We found that despite the dramatic reduction in defence orders, inconsistent government policies and extremely unfavourable macroeconomic environment, the Russian defence industry has made significant progress in its adjustment to the market. Even before the devaluation of the ruble in the autumn of 1998 economic performance of defence enterprises had been gradually improving; it entered a virtual boom since then. Contrary to widely held views, the painful experience of the 1990s has not made the top managers of the defence industry more hos...

This paper examines the influence of firm size and a number of other variables on the decision to adopt exporting as a strategic response to recent changes in the UK defence environment. It is shown that although a significant link is found between firm size and exporting in a univariate context, the relationship vanishes in more complex multivariate models. This suggests that size is acting as a proxy for variables such as the presence of R&D activities and international collaboration which are related to both exporting and firm size. Future studies of small firm exporting hence need to explicitly model the complex interrelationships between size, exporting and other important variables.

One of the least noticed inheritances of the new Labour government is Britain's military bias. The British economy has long born the imprint of Imperial levels of military spending, and it still hosts an exceptionally large defence industry (Fine and Harris 1985, Edgerton 1989,Wulf 1993). It is not only large, it is also changing radically. Labour has come to power at a crucial stage in the restructuring of arms production. It has adopted a strategy for the defence-industry which was developed largely by the industry itself. This article sets out the background and offers some suggestions as to the likely impact of the Blair government on the post Cold War reconstruction of the arms industry.