Merge and Compete: Strategic Incentives for Vertical Integration

The Incentives for Vertical Acquisitions and Integration

We examine the incentives for firms to vertically integrate through acquisitions and production. We develop a new firm-specific measure of vertical integration using 10-K text to identify the extent a firm’s products span vertically related product markets. We find that firms in high R&D industries are less likely to vertically integrate or become targets in vertical acquisitions, and are more ...

The Incentives for Vertical Mergers and Vertical Integration

We examine the incentives for firms to vertically integrate through vertical mergers and production. We develop a new firm-specific measure of vertical integration using 10-K text to identify the extent a firm’s products span vertically related product markets. We find that firms in high R&D industries are less likely to vertically integrate or engage in vertical mergers, and are more likely to...

Coexistence of strategic vertical separation and integration

Coexistence of Strategic Vertical Separation and Integration by Jos Jansen This paper gives conditions under which vertical separation is chosen by some upstream firms, while vertical integration is chosen by others in the equilibrium of a symmetric model. A vertically separating firm trades off fixed contracting costs against the strategic benefit of writing a (two-part tariff, exclusive deale...

The strategic value of partial vertical integration

We investigate the strategic incentives for partial vertical integration, namely, partial ownership agreements between manufacturers and retailers, when the retailers privately know their costs and engage in differentiated good price competition. The partial misalignment between the profit objectives within a partially integrated manufacturer-retailer hierarchy entails a higher retail price tha...

Vertical integration , information flows and the power of incentives