National Interests: Priorities and Security

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Cyberleninka (24 month OA embargo)

Conglomeration as a method for increasing the efficiency of the military-industrial sector

Vol. 11, Iss. 47, DECEMBER 2015

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Received: 8 September 2015

Received in revised form: 5 October 2015

Accepted: 22 October 2015

Available online: 24 December 2015

Subject Heading: Priorities of Russia

JEL Classification: 

Pages: 2-10

Sobolev L.B. Moscow Aviation Institute – National Research University, Moscow, Russian Federation

Importance Defensive and resource conglomerates, robust and rather autonomous hi-tech civilian subdivisions can become one of the methods for restructuring the Russian economy.
     Objectives The research evaluates whether it is possible to enhance the economic efficiency of the Russian aerospace corporations as one of the leading segments in the military-industrial sector.
     Methods I performed a comparative analysis of activities of the global aerospace leaders.
     Results Aggregation of assets should be regarded as the first step of restructuring the military-industrial complex. As the analysis and the Russian economic conditions show, it is necessary to involve highly profitable businesses (oil and gas assets, banks, trading and construction companies) into conglomerate aerospace corporations.
     Conclusions and Relevance Restructuring the aerospace segment of Russia, it is reasonable to involve highly profitable civilian businesses in those corporations, thus increasing the input of the corporations in R&D and alleviate the budgetary burden. It is especially relevant when budgetary revenues from sale of carbon hydroxides fall and international sanctions are imposed. Defensive and resource conglomerates can raise their revenue by substituting imported equipment for oil&gas and power industries, creating innovative transport or IT-products.

Keywords: conglomerate, diversification, aerospace corporation, hi-tech business, economic efficiency


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