Dissertation
The dual pipeline strategy in aerospace and defense: how government-funded demand shapes acquisition behavior and market reaction
Doctor of Business Administration (D.B.A.), Drexel University
Jun 2026
DOI:
https://doi.org/10.17918/00011475
Abstract
This dissertation examines whether government-funded demand predicts acquisition activity among publicly traded aerospace and defense firms and whether the same demand signal explains the market reaction to those acquisitions when they are announced. The aerospace and defense sector operates under a monopsony customer whose demand decisions are largely exogenous to firm performance. A reasonable prior would be that movements in the federal demand signal would dominate acquisition timing in this sector. The dissertation tests that prior using two complementary archival research designs. Hypothesis 1 is tested using a binary logistic regression on a firm-year panel of twelve publicly traded aerospace and defense firms classified within GICS subindustry 201010, spanning fiscal years 2010 through 2024 and yielding 141 firm-year observations after listwise deletion. Hypothesis 2 is tested using an event study and a cross-sectional ordinary least squares regression on 57 completed acquisition announcements made by firms in the H1 panel, with 52 observations retained in the cross-sectional regression after listwise deletion. The focal independent variable in both tests is the year-over-year percentage change in obligated federal dollars, lagged one year, drawn from System for Award Management (SAM.gov). Neither hypothesis is supported. The federal demand signal does not predict the timing of acquisition activity, and it does not explain variation in the announcement-period market reaction. What does predict acquisition activity in the panel are firm-level capital-structure variables. Lower leverage and smaller firm size are each significantly associated with higher acquisition probability. The mean announcement-window cumulative abnormal return is statistically indistinguishable from zero, consistent with the publicly observable federal demand information already being impounded into A&D security prices before any individual acquisition is announced. Two thinner contributions follow from these results. The first is a documented null on demand-driven acquisition timing in a public-information monopsony, locating the boundary at which the demand account can be tested with archival data at annual resolution. The second is empirical evidence consistent with semi-strong-form market efficiency in a sector whose demand-side information is public and continuously updated. The dual-pipeline framework is not refuted, but the conditions under which it can be empirically detected with annual firm-year data and a public-information demand signal are.
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Details
- Title
- The dual pipeline strategy in aerospace and defense
- Creators
- A. J. Johnson
- Contributors
- Gregory Nini (Advisor)Curtis Hall (Advisor)
- Awarding Institution
- Drexel University
- Degree Awarded
- Doctor of Business Administration (D.B.A.)
- Publisher
- Drexel University
- Number of pages
- ix, 73 pages
- Resource Type
- Dissertation
- Language
- English
- Academic Unit
- Bennett S. LeBow College of Business; Drexel University
- Other Identifier
- 991022193396504721