Airbus Versus Boeing Revisited: International Competition in the Aircraft Market

Topics:
Aerospace and Defense
Tags:
Aerospace & Defense,
Airbus,
Aircraft,
Boeing Co.,
Manufacturing
Source:
National Bureau of Economic Research

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Overview: This paper examines international competition in the commercial aircraft industry. The paper estimate a discrete choice, differentiated products demand system for wide-body aircraft and examine the Airbus-Boeing rivalry under various assumptions on firm conduct. It then uses this structure to evaluate two trade disputes between the United States and European Union. The results suggest that the aircraft prices increased by about 3 percent after the 1992 U.S. - E.U. agreement on trade in civil aircraft that limits subsidies. This price hike is consistent with a 7.5 percent increase in firms' marginal costs after the subsidy cuts.

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Format: PDF | Size: 250KB | Date: Dec 2001 | Pages: 38

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