An empirical evaluation of factors determining vertical integration in U.S. food manufacturing industries
AbstractVertical integration has become an important business strategy among food manufacturers because it allows them to manage and customize their production according to consumer needs. Economic theory has shown that vertical integration may be induced by transaction costs, demand variability, market power motives, and other factors. This paper presents an index of forward vertical integration for U.S. food manufacturing industries and uses an econometric analysis to examine the factors that motivate vertical integration in these industries. Empirical results indicate the role of both transaction cost factors and potential monopoly motives. [JEL Classification: L13, Q13.] © 2005 Wiley Periodicals, Inc. Agribusiness 21: 429-445, 2005.
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Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal Agribusiness.
Volume (Year): 21 (2005)
Issue (Month): 3 ()
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Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
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- Ronald W. Cotterill, 2001. "Neoclassical explanations of vertical organization and performance of food Industries," Agribusiness, John Wiley & Sons, Ltd., vol. 17(1), pages 33-57.
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