Financial capitalism and warfare: Asset managers' ownership in the military industry

This paper presents new compelling evidence on the company-level ownership structure of military firms detained by asset managers. Employing a unique firm-level interlinked dataset, connecting publicly listed firms in the aerospace and defense industry, and their corresponding structure of ownership, we give account of the tremendous increase of (i) the market capitalization of the industry, which represents the one achieving the highest variation during the period 2021-2025; (ii) the increasing penetration of asset managers, particularly of the so-called Big Four, in the ownership structure of the military complex. Notably, we find evidence of common ownership dynamics driven by asset managers' holdings in both the aerospace and defense sectors, as well as a temporal co-movement between alternative proxies for corporate performance and the ownership shares held by portfolio managers in the military industry. Our evidence supports the progressive shift of financial capitalism, largely US-based, toward opportunity of profitability in global conflicts, via their ownership of leading international military firms.