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

Abstract

The paper carries out an empirical 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 quantitative 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, 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; (4) demand opportunities and, relatedly, user-producer interactions.

Relationship Between Inflation and Real Economic Growth in Rwanda

“…The nature of this questionnaire was mainly quantitative and explanatory since the participants were asked to grade the influence of different variables on their firm's EP. By evaluating the data with a bivariate correlation and multiple regression, the relationships were identified, as previously done, for example, by Castellacci and Fevolden (2014), Fevolden et al (2015) and Stoian et al (2011). Moreover, the participants were encouraged to explain their grading and to suggest additional factors influencing EP.…”

The role of domestic markets in international technological innovation systems

“…We suggest that this is because larger firms have better access to important resources (financial, market access, research). These resources are particularly important in the absence of a home market (Castellacci 2012;Castellacci and Fevolden 2014). Further, we find that close proximity to the offshore wind markets in the North Sea can diminish some of the challenges associated with weak local market formation.…”

“…A relevant question for this paper is whether these user-producer relations need to occur at a local level or to what extent they can be established between actors in different countries. Empirical studies at firm and industry level have pointed to a positive correlation between the presence of a domestic market and export performance (Castellacci 2012;Castellacci and Fevolden 2014;Fagerberg 1995;Lundvall et al 2002). An important rationale behind market creation policies has therefore been based on the idea that the creation of 'lead-markets' in one country will stimulate industry formation (supply) in the same country.…”

“…First, the negative impact from a lack of a home market may be reduced through the presence of an internationally successful related industry (Porter 1998, 101-105). Second, firm size is considered to be particularly important as larger firms have the resources to overcome sunk export costs and trade barriers (Castellacci 2012;Castellacci and Fevolden 2014). In the following, we discuss how these factors might influence the possibility for firms and industries to access markets in other sub-TISs.…”

Offset Contracts as an Insurance Device in Building the National Security

“…There are no international statistics on offset cost-effectiveness and have been few evaluations of offset policies, with one of the latter being a case study by Castellacci and Fevolden (2014) whose results indicate that offset agreements had a clear role in overcoming entry barriers of three Norwegian defence firms in international markets. Fulfilling offset obligations involves some costs (e.g.…”