Date of Award

3-2023

Document Type

Thesis

Degree Name

Master of Science

Department

Department of Systems Engineering and Management

First Advisor

Clay M. Koschnick, PhD

Abstract

Faced with declining defense budgets following the end of the Cold War in the early 1990s, US defense contractors needed to explore other sources of revenue outside of typical domestic defense sales to survive. Expansion into the international defense sales market was one of the avenues pursued by defense contractors attempting to capture profits (Deutch, 2001). However, not many studies have been found assessing the relationship between international defense sales and profitability since then. This research examines the relationship between international defense sales and profitability using data collected on the top five US defense contractors from 1994-2021. Time-series analysis is employed to explore the relationship between international defense sales and profitability. Furthermore, this research also explores the relationship between commercial sales and profitability. The results of the analysis indicated that for Boeing, there is a statistically significant negative relationship between the percentage of international defense sales and profitability. Additionally, the study found that there is a significant positive relationship between the percentage of commercial sales and profitability for Boeing and Lockheed Martin.

AFIT Designator

AFIT-ENV-MS-23-M-232

Comments

A 12-month embargo was observed.

Approved for public release. Case number on file.

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