Fulvio Castellacci, TIK Centre for Technology, Innovation and Culture, University of Oslo and NUPI and Arne Fevolden, TIK Centre for Technology, Innovation and Culture, University of Oslo, and Nordic Institute for Studies in Innovation, Research and Education (NIFU), Norway

• Contents: 1. Introduction 2. The Defence Sector and Industrial Policies: Background, Stylized Facts and the Liberalization Scenario 3. What Explains the Export Performance of Firms in the Defence Industry? 4. Defence Companies’ Response to EU Liberalization: A Comparative Study 5. A Simulation Model of the European Defence Industry 6. Policy Scenario Analysis: Small Countries in a European Perspective 7. Conclusions and Policy Implications Index

‘The defence sector is a critical industry that is currently undergoing a phase of momentous transformation. Over the last twenty years, market liberalization, the growing instability of geo-political scenarios and rapid technological change have completely reshaped the structural features of this industry. Taking as a starting point the Norwegian case, Fulvio Castellacci and Arne Fevolden provide a very acute analysis of the main trends of evolution of the European defence industry. Their study makes good use of the latest insights emerging from the economics of innovation, international trade and industrial dynamics literature. One of the most innovative features of Castellacci and Fevolden’s approach is the construction of an industry-tailored agent based simulation model that permits the systematic exploration of different policy scenarios. Because of its broad scope and its original approach, this book is going to represent fundamental reading for all economists and political scientists interested in the defence industry for a long time to come.’