Vertical Integration and Competition

Vertical Integration and Competition Policy

Recently, the European Commission has decided to implement a simplified procedure in the context of vertical integration. If the combined market shares of the merging firms are less than 25 percent, upstream and downstream, the Commission will consider the merger harmless. The purpose of this study is to examine the welfare aspects of vertical integration in a simple model and investigate the a...

Downstream Competition, Foreclosure, and Vertical Integration

This paper analyzes the effect of competition among downstream Žrms on an upstream Žrm’s payoff and on its incentive to integrate vertically when Žrms in both segments negotiate optimal contracts. We argue that as downstream competition becomes more intense, the upstream Žrm obtains a larger share of a smaller downstream industry proŽt. The upstream Žrm may encourage downstream competition (eve...

Technical Change, Competition and Vertical Integration

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Vertical Integration and Production

We use two very large datasets to obtain some of the first systematic micro evidence on how production in vertically integrated firms differs from that of unlinked producers in the same industries. The Economic Census lets us observe virtually every establishment in the private economy, and crucially, the organizational structures of the firms that own them. The Commodity Flow Survey microdata ...

Retail Competition Percolating Through to Suppliers and the Use of Vertical Integration, Tying, and Vertical Restraints To Stop It