Acemoglu, D.; Aghion, P.; Griffith, R.; Zilibotti, F.; (2004) Vertical integration and technology: theory and evidence. (IFS Working Papers W04/34). Institute for Fiscal Studies: London, UK.

A more recent version of this eprint is available. Click here to view it.

Preview

PDF 2843.pdf Download (447kB)

Abstract

This paper investigates the determinants of vertical integration using data from the UK manufacturing sector. We find that the relationship between a downstream (producer) industry and an upstream (supplier) industry us more likely to be vertically integrated when the producing industry is more technology intensive and the supplying industry is less technology intensive. Moreover, both of these effects are stronger when the supplying industry accounts for a large fraction of the producer's costs. These results are generally robust and hold with alternative measures of technology intensity, with alternative estimation strategies, and with or without controlling for a number of firm and industry-level characteristics. They are consistent with the incomplete contract theories of the firm that emphasize both the potential costs and benefits of vertical integration in terms of investment incentives.

Available Versions of this Item

• Vertical integration and technology: theory and evidence. (deposited 25 Jun 2007 12:00) [Currently Displayed]
  • Vertical integration and technology: theory and evidence. (deposited 20 Nov 2009 12:48)

Download activity - last month

Export as JSONCSVXML

Download activity - last 12 months

Export as JSONXMLCSV

Downloads by country - last 12 months

Export as CSVXMLJSON

Archive Staff Only

View Item