Exploring the financial benefits of U.S. arms export production

Abstract

This research examines the role of arms export production in achieving financial cost savings to the U.S. Department of Defense (DoD). A review of three theoretical benefits, identified by arms trade scholars, that DoD enjoys as a result of arms export production shows that there is some merit to the claim that unit costs may be lowered as a result of exports. Using the F-16 fighter aircraft as a case study, this research employs financial cost analysis using cost improvement curves to estimate the extent to which DoD benefitted in terms of reduced per-unit costs through concurrent export production. This research makes a significant contribution to the cost analysis and arms exports literature by quantifying commonly purported financial benefits attributable to arms export production.