War and the Sectoral Distribution of Wealth: Evidence from United States Firms

International Studies Quarterly, Forthcoming

Posted: 21 Mar 2015

See all articles by Isa Camyar

Isa Camyar

University of Pennsylvania

Bahar Ulupinar

West Chester University of Pennsylvania

Date Written: March 19, 2015

Abstract

In this research, we examine the sector-specific distributive effect of war in the United States economy. We argue that war generates sector-specific distributive effects via demand-side and supply-side mechanisms. We also claim that war’s distributive effects materialize over time. Our empirical analysis utilizes a panel dataset with 22,354 U.S. firms for the period from 1960 to 2007. It probes the impact of the U.S. Government’s war making on firm performance in the U.S. arms and non-arms (hybrid and civilian) sectors in both the short and long runs. Our analysis shows that war does not always affect U.S. non-arms sectors adversely. Indeed, war exercises a positive total long-run effect for these sectors. It also finds that the supposedly positive distributive effect of war for U.S. arms sectors proves weaker than analysts generally assume. Finally, it demonstrates that war-induced demand and supply shocks can explain these results. Overall, our research sheds light on a relatively understudied aspect of war and advances the general understanding of the political micro-economy of war making.

Keywords: War, Distributional Effect, Firms, Arms Sectors, Civilian Sectors, United States

JEL Classification: N40, D31, D21, H56, L60, L70, L80, L90, O51, P16

Suggested Citation

Camyar, Isa and Ulupinar, Bahar, War and the Sectoral Distribution of Wealth: Evidence from United States Firms (March 19, 2015). International Studies Quarterly, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2581325

Isa Camyar (Contact Author)

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

Bahar Ulupinar

West Chester University of Pennsylvania ( email )

West Chester, PA 19383
United States

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