This research was supported by the Hewlett Funded Center for Research in Conflict and Negotiation at the Pennsylvania State University; the American Council of Learned Societies, with additional support from the National Endowment for the Humanities and the MacArthur Foundation; a Research Initiation Grant from the Pennsylvania State University; and a Postdoctoral Research Fellowship from the School of International Relations at the University of Southern California. Initial drafts were presented at the Northeast International Studies Association Meeting, November 1987, Philadelphia, Penn., and the International Studies Association Meeting, April 1986, Anaheim, Calif. I thank my Penn State colleagues James Curtis, James Eisenstein, Richard Kordesh, Nancy Love, and Larry Spence for their insightful comments and criticisms. In addition, I appreciate the critiques of Stephen Krasner, Susan Strange, J. Ann Tickner, and the anonymous reviewers of International Organization. Finally, I wish to acknowledge the work of my graduate research assistants, Andrea Lenshcow, Johannes Luchner, and Richard Tucker.

¹ “Commercial class aircraft” are defined by the U.S. Federal Aviation Administration as aircraft with over 12,500 pounds of takeoff weight.

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⁹ As defined by Strange and Tooze, a “sectoral study” is an analysis of “the political economy of a specific industry in its world context, or of specific markets for goods and services”. See Strange, Susan and Tooze, Roger, eds., The International Politics of Surplus Capacity (London: Allen and Unwin, 1981), p. 12Google Scholar.

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¹² Interview with Schaufele, Roger D., vice-president and general manager of commercial advanced products for Douglas Aircraft Company, 7 07 1988Google Scholar.

¹³ With nearly seventy airlines having over one thousand aircraft in their fleets, developing countries are important markets for commercial-class aircraft manufacturers.

¹⁴ See Golich, Vicki L., “Resisting Integration: Aerospace National Champions”, in Stirk, Peter and Willis, David, eds., Shaping Post War Europe (London: Pinter, 1991), pp. 124–140Google Scholar; Bluestone, Barry, Jordan, Peter, and Sullivan, Mark, Aircraft Industry Dynamics: An Analysis of Competition, Capital, and Labor (Boston: Auburn House, 1981)Google Scholar; Cunningham, William Glenn, “Postwar Developments and the Location of the Aircraft Industry in 1950”, in Simonson, G. R., ed., The History of The American Aircraft Industry (Cambridge, Mass.: MIT Press, 1968) pp. 182–207Google Scholar; Rae, John B., Climb to Greatness: The American Aircraft Industry 1920–1960 (Cambridge, Mass.: MIT Press, 1968)Google Scholar; and Stekler, Herman O., The Structure and Performance of the Aerospace Industry (Berkeley: University of California Press, 1965), p. 11Google Scholar.

¹⁵ See Taneja, Nawal K., U.S. International Aviation Policy (Lexington, Mass.: Lexington Books, 1980), p. 146Google Scholar; National Academy of Sciences, The Competitive Status of the U.S. Civil Aviation Manufacturing Industry: A Study of the Influences of Technology in Determining International Industrial Competitive Advantage (Washington, D.C.: National Academy Press, 1985), p. 5Google Scholar; and Kandebo, Stanley W. and McKenna, James T., “GE to Develop New Large-thrust Engine for Commercial Aircraft”, Aviation Week and Space Technology (22 01 1990), pp. 24–26Google Scholar.

¹⁶ For data on U.S. air traffic, see Aerospace Industry Association, Aerospace Facts and Figures 89/90 (Washington, D.C.: Aerospace Industries Association, 1989), p. 27Google Scholar; Aerospace Research Center, “Factors Influencing U.S. Aviation Technology Development”, Technology Readiness: Key to Long-term Market Strength of U.S. Civil Aircraft Manufacturers (Washington, D.C.: Aerospace Industries Association and the Office of Civil Aviation, 09 1989), p. 23Google Scholar. For world and regional air travel data, see O'Lone, Richard, “Airframe Makers Foresee Continuing Strong Market”, Aviation Week and Space Technology (18 03 1991), pp. 77–82Google Scholar; O'Lone, Richard, “Boeing Expects War, Economic Dip to Have Minimal Impact on World Transport Market”, Aviation Week and Space Technology 134 (4 03 1991), p. 33Google Scholar; and Oneal, Michael, Kelly, Kevin, Zellner, Wendy, and Payne, Seth, “Dogfight: United and American Battle for Global Supremacy”, Business Week (21 01 1991), p. 59Google Scholar.

¹⁷ The Export Credit Guarantee Department was established in Britain in 1920, and the U.S. Export–Import Bank (Eximbank) was created in 1934. In the Tokyo Round of the General Agreement on Tariffs and Trade negotiations, a code of conduct was adopted specifically addressing the issue of financing civil aircraft. A complex formula delineating acceptable financing terms was established. Nevertheless, public subsidies of this industry sector were back on the bargaining table of the Uruguay Round and continue to be a topic of debate. See Bond, David F., “Airbus Subsidy Dispute Highlights Clash of U.S.–EC Industrial Cultures, Aviation Week and Space Technology (17 06 1991), pp. 155–156Google Scholar; Golich, , The Political Economy of International Air Safety, pp. 47–50Google Scholar; and Hayward, Keith, International Collaboration in Civil Aerospace (New York: St. Martin's, 1986), p. 169Google Scholar.

¹⁸ Even with the current trend toward liberalization and privatization of international air transport, for nations outside the United States, government participation in aircraft sales negotiations is likely to persist for three reasons: (1) to date, liberalization has only affected the North American and North Atlantic markets; (2) the United Kingdom and Canada are among the very few nations that have pursued strategies of privatizing state-owned airlines; and (3) even if airlines are privatized, most states are more actively involved in supporting private actors than is the United States. See National Academy of Sciences, The Competitive Status of the US. Civil Aviation Manufacturing Industry, pp. 3 and 51–56Google Scholar; Gidwitz, Betsey, The Politics of International Air Transport (Lexington, Mass.: Lexington Books, 1980)Google Scholar; and Golich, Vicki L., “Liberalizing International Air Transport Services”, in Gayle, Dennis J. and Goodrich, Jonathan N., eds., Privatization and Deregulation in Global Perspective (New York: Quorum Books, 1990), pp. 156–176Google Scholar; and Lawler, Anthony J., presentation to the Air Transportation Research International Forum, Indianapolis, Ind., 12 06 1985Google Scholar. This conclusion is also supported by interviews with Bracken, Nicole, senior market analyst, Allied/Bendix Aerospace, 26 02 1986Google Scholar, and with Willy, Richard, director of airline market analysis, The Boeing Commercial Airline Company, 27 02 1986Google Scholar.

¹⁹ Although historical examples are easily cited, this logic will not necessarily prevail over the variety of considerations that help determine aircraft purchases. See Hayward, Keith, International Collaboration in Civil Aerospace, pp. 25–26Google Scholar; Gidwitz, , The Politics of International Air Transport, pp. 207–208Google Scholar; and Doganis, Rigas, Flying Off Course (London: Allen & Unwin, 1985), chap. 3Google Scholar.

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²¹ Hayward, , Government and British Civil Aerospace, p. 1Google Scholar. See also Hayward, , International Collaboration in Civil Aerospace, p. 22Google Scholar; and Phillips, Almarin, Technology and Market Structure (Lexington, Mass.: D.C. Heath, 1971), pp. 135–40Google Scholar.

²² Kelly, Kevin, Oneal, Michael, DeGeorge, Gail, and Vogel, Todd, “All the Trouble Isn't in the Sky”, Business Week (11 03 1991), pp. 84–85Google Scholar; and Lopez, Virginia and Yager, Loren, “An Aerospace Profile: The Industry's Role in the Economy, the Importance of R&D”, Facts and Perspectives (Washington, D.C: Aerospace Research Center, 04 1987), p. 5Google Scholar.

²³ Tyson, Laura, “Competitiveness: An Analysis of the Problem and a Perspective on Future Policy”, in Starr, Martin K., ed., Global Competitiveness: Getting the U.S. Back on Track (New York: W. W. Norton, 1988), p. 112Google Scholar.

²⁴ Jönsson, Christer, “Sphere of Flying: The Politics of International Aviation”, International Organization 35 (Spring 1981), p. 277CrossRefGoogle Scholar; Cooper, J. C., “Air Navigation Conference, Paris 1910”, Journal of Air Law and Commerce (Spring 1952), pp. 127–143Google Scholar; Cooper, J. C., The Right to Fly (New York: Henry Holt, 1952)Google Scholar; and Golich, , The Political Economy of International Air Safety, p. 15Google Scholar.

²⁵ Military aircraft were first used as “flying observation post[s]”. In the early months of World War I, “pilots adhered to a code of chivalry that forbade trying to harm a fellow flyer, even if he was an enemy”. Eventually, rifles, followed by machine guns and other sophisticated weapons, were mounted on the aircraft. See Winter, William, Byshyn, William, and Clark, Hank, Airplanes of the World, 1490–1969 (New York: Simon and Schuster, 1969), p. 49Google Scholar. Giulio Douhet, the father of strategic air power, transformed the airplane from a tactical to a strategic weapon.

²⁶ See Bacher, Thomas J., “The Economics of the Commercial Aircraft Industry”, mimeograph of a paper presented at a conference entitled The Role of South East Asia in World Airlines and Aerospace Development, Singapore, 24–25 09 1984, available from BoeingGoogle Scholar; Lopez, and Yager, , “An Aerospace Profile”, p. 42Google Scholar; Executive Office of the President, Office of Science and Technology Policy, National Aeronautical R&D Goals: Technology for America's Future (Washington, D.C.: U.S. Government Printing Office, 1985)Google Scholar; National Academy of Sciences, The Competitive Status of the U.S. Civil Aviation Manufacturing Industry, pp. 1–2 and 25Google Scholar; Neuman, Stephanie G., “International Stratification and Third World Military Industries”, International Organization 38 (Winter 1984), p. 175CrossRefGoogle Scholar.

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²⁸ Lopez, and Yager, , “An Aerospace Profile”, p. 1Google Scholar.

²⁹ These figures are derived from information published in Aerospace Industry Association, Aerospace Facts and Figures 89/90, pp. 136–37 and 142Google Scholar.

³⁰ Crandall, Robert, remarks to the International Aviation Club of Washington, Washington, D.C., 22 10 1991Google Scholar.

³¹ See Krugman, Paul, ed., Strategic Trade Policy and the New International Economics (Cambridge, Mass.: MIT Press, 1986)Google Scholar.

³² For example, the search for lighter but stronger materials for airframes was driven by the need to cut fuel costs by saving weight. The composite materials discovered are currently used in automobiles, boats, rapid transit vehicles, and a variety of sports equipment. See Committee on Technology Issues that Impact International Competitiveness, The Technological Dimensions of International Competitiveness (Washington, D.C.: Council for the National Academy of Engineering, 1988)Google Scholar; Seghers, Frances, “Science Lights a Bunsen Burner Under Washington”, Business Week (23 01 1989), pp. 94–96Google Scholar; and Tyson, , “Competitiveness”, pp. 116–17Google Scholar.

³³ As Gilpin has noted, the concept of prestige defies measurement and is difficult to define. It depends upon perceptions about “a state's capacities and its ability and willingness to exercise its power”. See Gilpin, , War and Change in World Politics pp. 29–33Google Scholar.

³⁴ Shepherd, Geoffrey and Duchêne, François, “Introduction: Industrial Change and Intervention in Western Europe”, in Shepherd, Geoffrey, Duchene, François, and Saunders, Christopher, eds., Europe's Industries: Public and Private Strategies for Change (Ithaca, N.Y.: Cornell University Press, 1983), p. 21Google Scholar.

³⁵ These figures are based on United Nations statistics as cited in Yager, Loren, “U.S. Aerospace Trade Continues to Grow: Share of World Market Declines”, Facts and Perspective (Washington, D.C.: Aerospace Research Center, 09 1987)Google Scholar. The figures measure the volume of world trade in aircraft and parts. They do not include aerospace products produced and sold in the United States; nor do they include missiles and space products included in U.S. trade figures.

³⁶ For weaker states, the industry's strategic value is an added centripetal force, impelling them to seek participation in the industry at any level. As a result of shifting power relationships, these relatively weak states may be able to coerce dominant states to pursue internationalized production strategies. For example, the People's Republic of China (PRC) has benefited from the competition between Boeing and McDonnell-Douglas, coercing each to establish joint venture projects that include various levels of production in the PRC.

³⁷ See Bergsten, C. Fred, Horst, Thomas, and Morgan, Theodore H., American Multinationals and American Interests (Washington, D.C.: The Brookings Institution, 1978)Google Scholar; Chandler, Alfred D. and Daems, Herman, eds., Managerial Hierarchies: Comparative Perspectives on the Rise of Modem Industrial Enterprise (Cambridge, Mass.: Harvard University Press, 1980)Google Scholar; Chapman, State Capitalism and Working-class Radicalism in the French Aircraft Industry; Porter, Michael E., The Competitive Advantage of Nations (New York: The Free Press, 1990)CrossRefGoogle Scholar; Shepherd, Duchêne, and Saunders, Europe's Industries; and Vernon, Raymond, ed., Big Business and the State: Changing Relations in Western Europe (Cambridge, Mass.: Harvard University Press, 1974)CrossRefGoogle Scholar.

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³⁹ Adam Smith specifically argued that transportation systems, such as harbors, canals, and roads, should be provided by the government. See Kindleberger, Charles P., Government and International Trade, Princeton Essays in International Finance, no. 129 (Camden, N.J.: International Finance Section, Princeton University, 1978)Google Scholar.

⁴⁰ If more than one carrier was designated a national champion, one served domestic and the other international routes; usually national champions were state owned. In the United States, Pan American Airlines was supported as the national champion primarily through the awarding of international airmail routes.

⁴¹ See Bluestone, , Jordan, , and Sullivan, , Aircraft Industry Dynamics, p. 17Google Scholar; Gidwitz, The Politics of International Air Transport; Golich, The Political Economy of International Air Safety, chap. 3; Hayward, International Collaboration in Civil Aerospace, chap. 5; Mowery, David C. and Rosenberg, Nathan, “The Commercial Aircraft Industry”, in Nelson, Richard R., ed., Government and Technical Progress: A Cross-Industry Analysis (New York: Pergamon, 1982) pp. 106–61Google Scholar; and Mowery, David C. and Rosenberg, Nathan, Technology and the Pursuit of Economic Growth (Cambridge: Cambridge University Press, 1989), chap. 7CrossRefGoogle Scholar.

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⁴³ See, for example, Servan-Schreiber, Jean-Jacques, The American Challenge (New York: Athenium, 1968)Google Scholar; and Katzenstein, Peter, Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States (Madison: University of Wisconsin Press, 1978)Google Scholar.

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⁴⁵ Nau, Henry, International Politics and International Technology (Baltimore, Md.: Johns Hopkins University Press, 1974), p. 12Google Scholar.

⁴⁶ The quotations are from Hayward, , International Collaboration in Civil Aerospace, pp. 52, 101, and 98, respectivelyGoogle Scholar. See also Newhouse, John, The Sporty Game: The High-Risk Competitive Business of Making and Selling Commercial Airliners (New York: Alfred A. Knopf, 1982), pp. 197–198Google Scholar.

⁴⁷ Hayward, , International Collaboration in Civil Aerospace, p. 53Google Scholar.

⁴⁸ Chapman, , State Capitalism and Working-class Radicalism in the French Aircraft Industry p. 37Google Scholar.

⁴⁹ Hayward, , International Collaboration in Civil Aerospace, p. 65Google Scholar.

⁵⁰ The quotation is from Milton S. Hochmuth, “Aerospace”, in Vernon, , Big Business and the State, p. 158Google Scholar. On this same point, see also Golich, “Resisting Integration”.

⁵¹ Hayward, , International Collaboration in Civil Aerospace, p. 24Google Scholar.

⁵² F27s were built under license in the United States by Fairchild; this represented one of the first “modern” moves toward internationalization.

⁵³ Both the United States and European states finance basic research agencies whose discoveries are available to the private sector; each will also contract for research programs with key corporations in the private sector to supplement the general research base.

⁵⁴ See Hayward, , International Collaboration in Civil Aerospace, pp. 30 and 157–161Google Scholar; Mowery, and Rosenberg, , “The Commercial Aircraft Industry”, pp. 140–146Google Scholar; Eades, G., “Government Support for Civilian Technology”, Research Policy (03 1974), p. 9Google Scholar; and Golich, , The Political Economy of International Air Safety, pp. 47–50Google Scholar.

⁵⁵ Aerospace Industries Association of America, Aerospace Facts and Figures 78/79 (Washington, D.C.: Aerospace Industries Association of America, 1978), p. 81Google Scholar.

⁵⁶ Mowery, , Alliance Politics and Economics: Multinational Joint Ventures in Commercial Aircraft (Cambridge, Mass.: Ballinger, 1987), pp. 47–48Google Scholar. See also Ferguson, Charles H., “Obsolete Arms Production, Obsolescent Military”, The New York Times (11 04 1988), p. A19Google Scholar; Hayward, , International Collaboration in Civil Aerospace, p. 17Google Scholar; Mowery, and Rosenberg, , Technology and the Pursuit of Economic Growth, p. 102Google Scholar; and Millar, Ronald and Sawyer, David, The Technical Development of Modern Aviation (London: Routledge and Kegan Paul, 1968)Google Scholar.

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⁵⁹ National Academy of Sciences, The Competitive Status of the U.S. Civil Aviation Manufacturing Industry, pp. 15 and 49Google Scholar; Michael Levine, “Deregulation—Seven Years Later and Beyond”, presented at the annual forecasting meeting entitled “Structural Changes in Aviation”, Federal Aviation Administration, Washington, D.C., 27 02 1986Google Scholar; Executive Office of the President, Office of Science and Technology Policy, National Aeronautical R&D Goals, p. 8Google Scholar; and Zysman, and Tyson, , American Industry in International Competition, p. 47Google Scholar.

⁶⁰ Lopez, and Yager, , “An Aerospace Profile”, p. 44Google Scholar. See also Hayward, International Collaboration in Civil Aerospace; Mowery, Alliance Politics and Economics; Laderman, Jeffrey M., “It's Bombs Away for Defense Stocks”, Business Week (4 12 1989), pp. 102–103Google Scholar; Pennar, Karen, Mandel, Michael J., Griffiths, Dave et al. “The Peace Economy: How Defense Cuts will Fuel America's Long-Term Prosperity”, Business Week (11 12 1989), pp. 50–55Google Scholar.

⁶¹ I have explained elsewhere that proponents of economically deregulating air transportation actually predicted that an oligopolistic production structure would eventually emerge. See Golich, , “Liberalizing International Air Transport Services”, pp. 156–57Google Scholar. For examples of their analyses see Bailey, Elizabeth, “Deregulation: Causes and Consequences”, Science (5 12 1986), p. 1211Google Scholar; Brenner, Melvin A., “Airline Deregulation—A Case Study in Public Policy Failure”, Transportation Law Journal 16 (1988), pp. 182–83Google Scholar; Kahn, Alfred, “Airline Deregulation—A Mixed Bag”, Transportation Law Journal 16 (05 1988), p. 250Google Scholar; Kasper, Daniel, Deregulation and Globalization: Liberalizing International Trade in Air Services (Cambridge, Mass.: Ballinger, 1988), p. 37Google Scholar; Levine, Michael, “Airline Competition in Deregulated Markets: Theory, Firm Strategy, and Public Policy”, Yale Journal on Regulation (04 1987), p. 418Google Scholar; Levine, Michael, “The Legacy of Airline Deregulation: Public Benefits, But New Problems”, Aviation Week and Space Technology (9 11 1987), p. 161Google Scholar; and Wilkins, B., “Airline Deregulation: Neoclassical Theory as Public Policy”, Journal of Economic Issues 18 (05 1984), pp. 420–22CrossRefGoogle Scholar.

⁶² See Bremmer, Brian, Rebello, Kathy, Schiller, Zachary et al. , “The Age of Consolidation”, Business Week (14 10 1991), pp. 86–94Google Scholar; Ott, James, “Delta Gambles on Expansion Plans as Competitors Find Traffic Declining”, Aviation Week and Space Technology 134 (4 03 1991), pp. 35–42Google Scholar; and Ott, James, “Lawmakers Warned of Looming Capital Crisis for U.S. Airlines”, Aviation Week and Space Technology 134 (11 02 1991), p. 32Google Scholar.

⁶³ In response to economic deregulation, airlines adopted three new survival strategies which led to this decrease in aircraft demand. First, route structures were shifted to a hub-and-spoke network, requiring a return to smaller aircraft. Airlines with such planes continued to use them as long as they met noise pollution requirements, fuel prices remained low, and labor costs continued to drop. Second, airlines implemented fare wars to capture new and maintain old markets, resulting in decreased profitability; between 1980 and 1983, U.S. certificated air carriers incurred operating losses totaling almost $1.6 billion; and in 1990, the industry posted a net loss of nearly $4 billion. Third, through strategies of acquisitions and mergers, airlines rationalized production, acquiring aircraft in the process. On the first and second points, see U.S. Department of Transportation, FAA Aviation Forecasts: Fiscal Year 1986–1997, publication no. FAA-APO-86-a (Washington, D.C.: U.S. Government Printing Office, 1986), pp. 19–46Google Scholar; and Hage, David, “A Wing and A Prayer”, U.S. News & World Report (11 1991) pp. 70–74Google Scholar.

⁶⁴ Waltz, Kenneth N., Theory of International Politics (Reading, Mass.: Addison-Wesley, 1979), pp. 105–106Google Scholar. For a discussion of the U.S. preference for this world view, see Ugen, Autonomy and Interdependence.

⁶⁵ Morrocco, John D., “Pentagon Reviews Trade Pacts to Standardize Joint Projects”, Aviation Week and Space Technology (19 10 1987), p. 45Google Scholar.

⁶⁶ Gaddis, John Lewis, The United States and the Origins of the Cold War (New York: Columbia University Press, 1972), p. 23Google Scholar.

⁶⁷ Bluestone, , Jordan, , and Sullivan, , Aircraft Industry Dynamics, pp. 86–87Google Scholar. See also Golich, , The Political Economy of International Air Safely, p. 63Google Scholar; Newhouse, The Sporty Game, p. 188Google Scholar; and “U.S. Lifts Ban on Jet Engine Venture with France's SNECMA”, New York Times (23 June 1973), p. 37.

⁶⁸ National Academy of Sciences, The Competitiveness Status of the U.S. Civil Aviation Manufacturing Industry, pp. 13–14Google Scholar.

⁶⁹ Ibid..

⁷⁰ Fuqua, Donald, “The FSX: Looking Backward, Look Forward”, Aerospace Industries Association Newsletter 2 (10 1989), p. 3Google Scholar.

⁷¹ Hayward, , International Collaboration in Civil Aerospace, p. 27Google Scholar.

⁷² Ibid., pp. 31 and 94–95. See also Bluestone, , Jordan, , and Suttivan, , Aircraft Industry Dynamics, pp. 159–160Google Scholar; Harr, K. G. as quoted in Industry Week (17 01 1972)Google Scholar; and Aviation Week and Space Technology (31 May 1971), p. 58.

⁷³ “Boeing Plans Substantial Foreign Involvement in 7–7 Development”, Aviation Week and Space Technology (3 June 1985), p. 212.

⁷⁴ Using Lopez and Yager's definitions, “licensing” involves the “transfer of know-how, patents, or trademarks to a company abroad in return for licensing fees or royalties”, which help offset high research and development costs. “Direct investment”, less typical in the aerospace industry, involves the acquisition of aerospace companies abroad and is usually inspired by the desire to gain access to technology, markets or capital. “International joint ventures” can involve “cooperation in design, production and marketing and, importantly, in the funding of these efforts. Joint ventures permit companies to expand markets while maintaining selective control of their technological assets. See Lopez, and Yager, , “An Aerospace Profile”, pp. 6–7Google Scholar.

⁷⁵ “Prime manufacturers” have the responsibility of developing and delivering a finished product of their own design, supervising the work of their subcontractors, and integrating the subsystem into the final product. See Stekler, Herman O., The Structure and Performance of the Aerospace Industry, p. 47Google Scholar; and Thomas J. Bacher, “The Economics of the Commercial Aircraft Industry”.

⁷⁶ It is important to note that domestic production does not ensure domestic purchase. Eastern Air Lines bought Airbus Industrie aircraft for its fleet in 1978; since then, American Airlines, America West Airlines, Continental Air Lines, Federal Express Corporation, Northwest Air Lines, PanAm, and TWA have all ordered Airbus Industrie aircraft. British Airways still purchases Boeing aircraft as part of its fleet, despite British Aerospace's (BAe) larger participation in the production of Airbus. (BAe is a real winner since it also makes components for Boeing aircraft.) National carriers of Airbus Industrie consortium members are under no legal obligation to buy Airbus Industrie products. In 1991, these carriers owned more U.S.-manufactured aircraft than they had in service or on order from Airbus Industrie. See Alizart, Robert, “Further Calculations on Airbus' Strength”, Business Week (20 05 1991), p. 20Google Scholar.

⁷⁷ See Fuqua, , “The FSX”, p. 3Google Scholar; National Academy of Sciences, The Competitive Status of the U.S. Civil Aviation Manufacturing Industry pp. 63–64Google Scholar; and Mowery, , Alliance Politics and Economics, p. 158Google Scholar.

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⁷⁹ Williams, Roger, “The International Political Economy of Technology”, in Strange, Susan, ed., Paths to International Political Economy (London: Allen and Unwin, 1984), pp. 70–71Google Scholar.

⁸⁰ See Fuqua, , “The FSX”, p. 3Google Scholar; and Julius, DeAnne, Global Companies & Public Policy: The Growing Challenge of Foreign Direct Investment (New York: Council on Foreign Relations Press, 1990), pp. 8–9 and 98Google Scholar.

⁸¹ On reciprent complaints, see Hartley, Keith, NATO Arms Cooperation: A Study in Economics and Politics (London: Allen & Unwin, 1983), pp. 132–33 and 144Google Scholar; “Japanese Technology Survey: Back to the Drawing Board”, The Economist (2 December 1989), pp. 3–5; and “Zeroing In”, The Economist (2 December 1989), pp. 15–16.

⁸² Williams, David L., letter to the author, 4 06 1991Google Scholar.

⁸³ See Perlmutter, Howard V. and Heenan, David A., “Cooperate to Compete Globally”, Harvard Business Review (03/04 1986), pp. 136–52Google Scholar; and Gray, Collaborating.

⁸⁴ Ruggie, John Gerard, “International Responses to Technology: Concepts and Trends”, International Organization (Summer 1975), p. 566Google Scholar. See also Ferguson, , “Obsolete Arms Production, Obsolescent Military”, p. A19Google Scholar; Toy, Stewart, Oneal, Michael, Magnusson, Paul et al. “Zoom! Airbus Comes On Strong”, Business Week (22 04 1991), pp. 48–50Google Scholar.

⁸⁵ See Hayward, , International Collaboration in Civil Aerospace, p. 200Google Scholar. This view is supported by comments from the McDonnell-Douglas director of program development and marketing. He says, “Technology is not too much of a problem in the commercial transport business. Often we find that other countries have as good or better technology than we have”. See Williams, letter to the author.

⁸⁶ See Krasner, Stephen, letter to the author, 6 08 1990Google Scholar; and Tucker, Jonathan B., “Partners and Rivals: A Model of International Collaboration in Advanced Technology”, International Organization 45 (Winter 1991), pp. 83–120CrossRefGoogle Scholar. For arguments of technology transfer opponents, see the following works: Bentley, Helen Delich, “The Plane Drain: The FSX Deal and Other Transfer of Technology”, Conservative Digest 15 (07/08 1989), pp. 54–57Google Scholar; Dryden, Steven J. and Gross, Neil, “Are We Giving Japan Blueprints for a World-class Aircraft?” Business Week (20 06 1988), p. 62Google Scholar; Mecham, Michael, “Technology Concerns Delay Approval of FS-X Agreement”, Aviation Week and Space Technology (20 02 1989), pp. 16–17Google Scholar; “AEA Hits FSX Deal with Japan”, Electronic News 35 (20 03 1989), p. 37Google Scholar; and “U.S. Technological Lead at Risk”, Aviation Week and Space Technology (1 August 1988), p. 7. For arguments in favor of technology transfer, see Armacost, Michael H., “Too Much at Stake to Fail in Solving U.S.–Japan Problems”, Financier 13 (07 1989), pp. 17–20Google Scholar; Aurman, Barry S., “Bush Administration Officials Defend Accord with Japan”, Congressional Quarterly Weekly Report 47 (6 05 1989), p. 1058Google Scholar; and Leader, Charles, “Japan Unlikely to Parlay FSX Work into Civilian Aircraft Leadership Role”, Aviation Week and Space Technology (27 03 1989), pp. 97Google Scholar and 99. For a general discussion of the issues, see Agnes, Ted, “FSX Deal Polarizes Opinions on Trade in U.S. and Japan”, Research & Development (05 1989), pp. 36–74Google Scholar; Greenwald, John, “Friend or Foe?” Time (24 04 1989), pp. 44–45Google Scholar; and Towell, Pat, “U.S.–Japanese Warplane Deal Raises a Welter of Issues”, Congressional Quarterly Weekly Report (11 03 1989), pp. 535–37Google Scholar.

⁸⁷ Baranson, Jack, “Technology Transfer: Effects on U.S. Competitiveness and Employment”, in Dewald, William G., ed., The Impact of International Trade and Investment on Employment: A Conference on the Department of Labor Research Results (Washington, D.C.: U.S. Government Printing Office, 1978), p. 178Google Scholar.

⁸⁸ See Perlmutter, and Heenan, , “Cooperate to Compete Globally”, pp. 82 and 136–52Google Scholar; and Hochmuth, M. S., Organizing the Transnational: The Experience with Transnational Enterprise in Advanced Technology (Cambridge, Mass.: Harvard University Press, 1974), p. 15Google Scholar.

⁸⁹ While the number and variety of transnational arrangements is increasing at a rapid pace, their popularity is a fairly recent phenomenon. Thus, scholarly analysis of the necessary and sufficient conditions for transnational arrangements has achieved little more than identification of those factors that successful projects share. These factors are identified here.

⁹⁰ Perlmutter, and Heenan, , “Cooperate to Compete Globally”, pp. 83–84 and 150–52Google Scholar.

⁹¹ In an excellent effort to move the discussion further, Tucker has suggested an elaborate model of two-partner decision-making when technology transfer is the primary issue driving a potential partnership. See Tucker, , “Partners and Rivals”, pp. 83–120Google Scholar.

⁹² See Gilpin, U.S. Power and the Multinational Corporation; and Chandler and Daems, Managerial Hierarchies.

⁹³ See Toy, et al. , “Zoom!” p. 48Google Scholar; and Hayward, , International Collaboration in Civil Aerospace, pp. 58 and 172Google Scholar. According to McDonnell-Douglas's Williams, in 1989 Airbus received orders for 24.6 percent of the market, while Boeing captured 53.7 and MDC 13.9 percent. In 1990, the figures were 34 percent for Airbus, 44.9 percent for Boeing, and 14 percent for MDC. See Williams, letter to the author.

⁹⁴ Aviation Week and Space Technology (20 March 1989), pp. 197–202 and 225–32.

⁹⁵ Tucker, , “Partners and Rivals”, pp. 119–120Google Scholar.

⁹⁶ Ilgen, , Autonomy and Interdependence, p. 141Google Scholar. On this point, see also Gilpin, War and Change in World Politics.

⁹⁷ Zysman, and Tyson, , American Industry in International Competition, pp. 34–35Google Scholar.

⁹⁸ Mowery, , Alliance Politics and Economics, p. 167Google Scholar.

⁹⁹ Hayward, , International Collaboration in Civil Aerospace, pp. 86–87Google Scholar.

¹⁰⁰ Often U.S. regulations are perceived by Europeans to be ineffective, unreliable, and used primarily to manipulate the marketplace rather than to ensure safety in production and flight. See Golich, The Political Economy of International Air Safety, chap. 3.

¹⁰¹ Interview with Koplin, Klaus, West German civil aviation authority, Braunschweig, West Germany, 07 1987Google Scholar.

¹⁰² Woolcock, , Hart, , and Ven, van der, Interdependence in the Post-multilateral Era, p. 136Google Scholar.