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The Impact of Competition on “Make-or-Buy” Decisions: Evidence from the Spanish Local TV Industry

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  • Ricard Gil

    (Johns Hopkins Carey Business School, Baltimore, Maryland 21202, Public-Private Sector Research Centre, IESE Business School, University of Navarra, 31008 Pamplona, Navarra, Spain)

  • Christian A. Ruzzier

    (Universidad de San Andrés, B1644BID Victoria, Buenos Aires, Argentina)

Abstract

This paper empirically investigates whether changes in product market competition affect firm boundaries. Exploiting regulation-induced shocks to entry barriers and differences in regulation enforcement across cities to obtain exogenous variation in competition, we establish a negative causal effect of competition (through reduced entry barriers and a larger number of rival firms) on vertical integration in the setting of the Spanish local television industry between 1995 and 2002.

Suggested Citation

  • Ricard Gil & Christian A. Ruzzier, 2018. "The Impact of Competition on “Make-or-Buy” Decisions: Evidence from the Spanish Local TV Industry," Management Science, INFORMS, vol. 64(3), pages 1121-1135, March.
    • Handle: RePEc:inm:ormnsc:v:64:y:2018:i:3:p:1121-1135
    DOI: 10.1287/mnsc.2016.2633
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    3. Zhenjun Yan & Xinyan Wu & Jing Li & Bingqing Liang, 2022. "Competition and Heterogeneous Innovation Qualities: Evidence from a Natural Experiment," Sustainability, MDPI, vol. 14(13), pages 1-21, June.
    4. Faisal Khurshid & Woo‐Yong Park & Felix T. S. Chan, 2020. "The impact of competition on vertical integration: The role of technological niche width," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 789-800, March.
    5. Yudan Dou & Xiaolong Xue & Zebin Zhao & Xiaowei Luo, 2019. "Factors Influence China’s Off-Site Construction Technology Innovation Diffusion," Sustainability, MDPI, vol. 11(7), pages 1-23, March.

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