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Vertical Integration and Firm Boundaries: The Evidence

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  • Francine Lafontaine
  • Margaret Slade

Abstract

Since Ronald H. Coase's (1937) seminal paper, a rich set of theories has been developed that deal with firm boundaries in vertical or input–output structures. In the last twenty-five years, empirical evidence that can shed light on those theories also has been accumulating. We review the findings of empirical studies that have addressed two main interrelated questions: First, what types of transactions are best brought within the firm and, second, what are the consequences of vertical integration decisions for economic outcomes such as prices, quantities, investment, and profits. Throughout, we highlight areas of potential cross-fertilization and promising areas for future work.

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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Literature.

Volume (Year): 45 (2007)
Issue (Month): 3 (September)
Pages: 629-685

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Handle: RePEc:aea:jeclit:v:45:y:2007:i:3:p:629-685

Note: DOI: 10.1257/jel.45.3.629
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  1. New Survey Paper on Vertical Integration
    by Peter Klein in Organizations and Markets on 2007-09-21 20:27:28
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