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Abstract
ABSTRACT In the White Paper for European Defence – Readiness 2030, the European Defence Technological and Industrial Base (EDTIB) has a central role in the renewed impetus towards a European defence pillar triggered by the changes in the European geopolitical landscape. The EDTIB is a crucial pillar since it is required to produce and supply the weapons systems needed to augment EU states' military capabilities. Recognising its strategic importance, the Commission published the first-ever European Defence Industrial Strategy that seeks to increase intra-EU defence industrial cooperation and promote collaborative defence equipment development and procurement. The paper sets out to examine the degree of connectedness among major European defence industries applying a quantile connectedness approach to examine the degree and direction of connectedness among 15 major European defence companies. The estimations span the period from January 2018 to February 2024, which allows for a total of 1453 daily stock price observations per company. Results reported herein suggest the presence of a strong total connectedness among these major European defence industries. The findings reveal three broad groupings with respect to net total directional connectedness: a net-transmitting group, a net-receiving group of defence industries and finally a group that exhibits mixed connectedness.
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