The Political Economy of Aerospace Industries
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The Political Economy of Aerospace Industries

A Key Driver of Growth and International Competitiveness?

Keith Hartley

The Political Economy of Aerospace Industries will appeal to undergraduate and graduate students in industrial and defence economics, public choice and policy courses. It will also be of interest to researchers, policy-makers and those involved in the industry in various different capacities.
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Chapter 2: An overview of the world aerospace industry

Keith Hartley


This chapter provides a broad overview of the world’s aerospace industries. It comprises two parts. Part I presents a brief history. This shows the industry’s transformation from an infant industry to an advanced technology industry. It shows a sector shifting from a private venture industry to one with substantial dependence on government funding. Part II presents some descriptive statistics of the world’s major aerospace industries and firms. These provide some of the ‘stylised facts’ to be analysed in this book. The aircraft industry is an example of the emergence and rapid development of a new industry. It did not exist in 1900, but by 2014 it had transformed from an aircraft industry to an aerospace industry. Governments have been central to the development and transformation of the industry through their military demands and state funding of both military and civil aircraft. In private enterprise economies, an industry emerges and develops on the basis of private markets which comprise privately-owned companies and large numbers of private consumers (purchasers). These market arrangements can be classified as private provision and private finance. A contrasting situation comprises state-owned firms and government as a major customer representing state provision and state finance. This distinction between private and state provision and finance provides a basis for understanding the development of the aircraft and aerospace industry.

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