Issues in the quantitative analysis of the SIPRI arms industry database


  • Ron Smith Birkbeck College, University of London
  • J. Paul Dunne University of Cape Town



Arms industry, data, SIPRI


Although the Stockholm International Peace Research Institute’s data on the 100 largest arms (and military services) producing firms is very widely used for various purposes, there is relatively little quantitative statistical analysis of it. This article discusses some of the issues involved in the econometric analysis of the data. This is complicated by the difficulty of modeling the processes of mergers, acquisitions, and divestments which drives entry and exit from the list. Various models are estimated to examine (a) the relationship between arms sales and military expenditure, (b) the evolution of concentration and the size distribution of firms, (c) the cross-section relationship between size and growth of firms, (d) the times-series properties of the arms sales of individual firms, and (e) of arms sales by country of ownership.


Dunne, J.P., M. Garcia-Alonso, P. Levine, and R.P. Smith. 2007. “Determining the Defence industrial Base.” Defence and Peace Economics. Vol. 18, No. 3, pp. 199–221.

Dunne, J.P. and R.P. Smith. 2016. “The Evolution of Concentration in the Arms Market.” The Economics of Peace and Security Journal. Vol. 11, No. 1, pp. 12–17.

Hartley, K. 2017. The Economics of Arms. Newcastle upon Tyne, UK: Agenda Publishing.

Smith, R.P. 2013a. “The Defense Industry in an Age of Austerity.” The Economics of Peace and Security Journal. Vol. 8, No. 1, pp. 18–22.

Smith, R.P. 2013b. “The Economics of Defence in France and the UK.” in Jacques Aben, et al., eds. Liber Amicorum: Hommage en l'honneur du Professeur Jacques Fontanel. Paris: L’Harmattan. Revised version published as Birkbeck Working Papers in Economics and Finance 1304.

Smith, R.P. 2017. “Military Expenditure Data: Theoretical and Empirical Considerations.” Defence and Peace Economics. Vol. 28, No. 4, pp. 422–428.

Smith, R.P. and A. Tasiran. 2010. “Random Coefficient Models of Arms Imports.” Economic Modeling. Vol. 27, pp. 1522–1528.




How to Cite

Smith, R., & Dunne, J. P. (2018). Issues in the quantitative analysis of the SIPRI arms industry database. The Economics of Peace and Security Journal, 13(2).




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