Defense Contractor Profit
Technical Report,01 Aug 2018,26 Mar 2020
AIR FORCE INSTITUTE OF TECHNOLOGY WRIGHT-PATTERSON AFB OH WRIGHT-PATTERSON AFB United States
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This research seeks to achieve two objectives 1 to provide a comprehensive survey of research related to defense contractor profitability, and 2 to conduct an updated analysis of such profitability. No previous comprehensive survey of the topic was found in the academic literature. Therefore, the provision of such a survey may significantly benefit future researchers. A paucity of recent defense contractor profit research related was identified only one published study analyzed data after 2000 and none used data more recent than 2010. This research reconciles the gap in recent defense contractor profit studies via objective two. Panel data analysis is employed to examine the profitability of defense contractors between 2009 and 2018. The relationship between contractor influence in the defense marketplace and profits from defense business is explored as well as the relationship between contractor operating risk and defense business profits. Additionally, the relationship between defense contractor profitability and the percentage of total sales attributed to defense versus commercial sales is investigated. Neither contractor influence, nor risk was found to have a moderating effect on defense business profits. The empirical evidence did however indicate a positive relationship between contractor profitability and the percentage of total sales from defense business.
- Logistics, Military Facilities and Supplies
- Economics and Cost Analysis