Answer to Question #165798 in Economics for Harmandeep kaur mann

Question

How does the new trade theory help us to understand why the United States is dominant in the world market for commercial aircraft exports? 

Answer 1

The civil aircraft market is a globally growing market without national borders and at the same time is characterized by fierce competition from domestic manufacturers. Daunting technological challenges and high costs are the reason that only a small number of countries and a few large companies operate in the aircraft industry. Thus, competition in the aircraft manufacturer market is oligopolistic; dominated by a few large international companies with a strong influence on the entire market.

The leaders of the civil aircraft industry in recent decades have been Boeing (USA) and Airbus (EC), which occupy more than 90% of the global passenger aircraft market, but the technological development of the industry and the emerging demand patterns in the coming years will lead to the destruction of the already familiar duopoly of Western aircraft manufacturing giants.

This is due to the high degree of industrialization of these industries and the formation of the manufacturer's image.