Vertical Integration and Input Flows

Vertical integration , information flows and the power of incentives

The Effects of Vertical Integration on Competing Input Suppliers

When a downstream firm buys an input supplier, the downstream firm can reduce its costs of using that input. Other input suppliers typically respond by pricing more aggressively, given the demand reduction, which tends to lower input supply costs to other firms. Thus a vertical merger may lower rival's costs, rather than raise them. ∗ I have benefited from the comments of Joe Haubrich and Willi...

The Effects of Vertical Integration on Competing Input Suppliers

Vertical integration is a booming phenomenon in many U.S. industries. Massive consolidation of the defense industry has left only three or four developers producing many of the components used in military platforms.1 Banking also is consolidating at a rapid pace, with integration of related financial services (insurance, credit cards) and input services (check clearing, payments, electronic fun...

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 ...

Vertical Integration and Operational Flexibility

The main aim of the paper is to highlight the relation between flexibility and vertical integration. To this purpose, we go through the selection of the optimal degree of vertical disintegration of a flexible firm which operates in a dynamic uncertain environment. The enterprise we model enjoys flexibility since it can switch from a certain amount of disintegration to vertical integration and v...