Vertical Integration and Firm Boundaries: The Evidence

Vertical Integration and Firm Boundaries: The Evidence

An Empirical Examination of Transaction- and Firm-level Influences on the Vertical Boundaries of the Firm

A large literature has successfully employed transaction cost economic theory to describe how exchange conditions affect the optimal form of organization. However, this approach has historically not accounted for the influence of firm-specific attributes on the governance decision. This paper develops a model based on insights from transaction cost economics, the resourcebased view, and real op...

Does Vertical Integration Affect Firm Performance? Evidence from the Airline Industry

This paper investigates the performance implications of firms’ vertical integration decisions. Our setting is the U.S. airline industry. Major airlines subcontract service on low-density short and medium-haul routes to regional airlines. These regional partners are either owned by the major airline or are independently owned and contract with one or more major airlines. Earlier work (Forbes and...

Vertical Integration and Technology: Theory and Evidence

This paper investigates the determinants of vertical integration and confronts some of the predictions of the leading approach to the internal organization of the firm with data from the UK manufacturing sector. Consistent with the theory, it shows that an upsteam and downstream activity pair are more likely to be vertically integrated, when the downstream (the producer) is more technology inte...

Information Technology and Firm Boundaries: Evidence from Panel Data

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