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Vertical Integration And Different Inputs

Author

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  • Porter, M. E.
  • Spence, A. M.

Abstract

Vertical integration decisions, which determine the boundries of the firm, are among the largest decisions firms make and can have a major influence on firm success. In some cases the failure to integrate can result in the inability to obtain the desired inputs at reasonable prices. In other instances, an integrated firm may be severely affected by economic fluctuations due to overhead that the unintegrated firms do not bear. Research on vertical integration has stressed the balance between the inflexibility of integration and the cost reduction and / or potential increase in market power that integration may allow.
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Suggested Citation

  • Porter, M. E. & Spence, A. M., 1977. "Vertical Integration And Different Inputs," Economic Research Papers 269018, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:269018
    DOI: 10.22004/ag.econ.269018
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    Cited by:

    1. Walter Elberfeld, 2001. "Explaining Intraindustry Differences in the Extent of Vertical Integration," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 157(3), pages 465-477, September.
    2. Choi, Jay Pil, 1998. "Information concealment in the theory of vertical integration," Journal of Economic Behavior & Organization, Elsevier, vol. 35(1), pages 117-131, March.

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