An analysis of the relationship between the financial condition of major defense contractors and DoD spending.

Abstract

The purpose of this thesis is to examine the relationship between the financial condition of defense contractors and the amount of Department of Defense spending from 1975 to 1990. The sample for this study consists of eighteen major defense contractors. The relationships are examined at two levels. The first level is that of the financial condition of the defense industry in the aggregate. The second level is that of the individual defense contractors. The major findings of this study are that: 1 ) the aggregate industry of defense contractors has experienced a declining financial condition from 1975 to 1990; 2) a positive relationship seems to exist between the financial condition of the defense industry and the amount of defense spending; 3) no consistent relationship between the financial condition of the individual defense contractors and the amount of defense spending is apparent.