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 3: Aerospace markets

Keith Hartley


At first sight, aerospace markets are like all other markets in comprising buyers and sellers of aerospace products, namely aircraft, helicopters, missiles and space systems. But once the buyers are identified, some distinguishing features emerge. This chapter shows that aerospace markets are ‘different’ from other private commercial markets and have some distinguishing and important economic features resulting from the importance and role of government. It starts with a definition of aerospace markets followed by their distinguishing features. Military and civil aerospace markets are analysed and attention is given to the newly developing space market. Aerospace is not a single market but comprises many sub-markets. There are military and civil markets for aircraft, helicopters, missiles and space systems. Military markets are varied with markets for combat aircraft, trainer aircraft, military transports and specialised aircraft (e.g. air tankers; radar, surveillance and communications aircraft). There are also military markets for various types of missiles, including surface-to-air missiles for air defence, air-to-air missiles launched from aircraft and cruise missiles launched from aircraft, warships, submarines and land. Space has a military role with military markets for rocket launchers and satellites for communications and surveillance. Buyers in military markets are different from buyers in, say, markets for motor cars where there are large numbers of private consumers. In contrast, military markets are dominated by governments as buyers.

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