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Vertical integration vs. specialization: a nonparametric conditional efficiency estimate for the global semiconductor industry

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  • Guangshun Qiao

    (Wenzhou Business College)

  • Zhan-ao Wang

    (Wenzhou Business College)

Abstract

This paper applies a two-stage nonparametric approach to compare companies operating in different business models in the global semiconductor industry. Using panel data over 1999–2018 on 470 companies in the global semiconductor industry, we explore the operating performance of the semiconductor companies conditional on capital investment and between the integrated device manufacturers and the fabless-foundry business model. We find that vertically integrated device manufacturers are constrained heavily by capital investment. Disentangling the effects of capital investment and business model by a second-stage nonparametric regression, this paper identifies that the vertically specialized fabless-foundry business model helps to improve pure efficiency and mitigate the impact of business-cycle in the global semiconductor industry.

Suggested Citation

  • Guangshun Qiao & Zhan-ao Wang, 2021. "Vertical integration vs. specialization: a nonparametric conditional efficiency estimate for the global semiconductor industry," Journal of Productivity Analysis, Springer, vol. 56(2), pages 139-150, December.
    • Handle: RePEc:kap:jproda:v:56:y:2021:i:2:d:10.1007_s11123-021-00616-x
    DOI: 10.1007/s11123-021-00616-x
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    References listed on IDEAS

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    Cited by:

    1. Léopold Simar & Valentin Zelenyuk & Shirong Zhao, 2023. "Further improvements of finite sample approximation of central limit theorems for envelopment estimators," Journal of Productivity Analysis, Springer, vol. 59(2), pages 189-194, April.
    2. Song, Yanwu & Dong, Ying, 2024. "Influence of resource compensation and complete information on green sustainability of semiconductor supply chains," International Journal of Production Economics, Elsevier, vol. 271(C).
    3. Kneip, Alois & Simar, Léopold & Wilson, Paul W., 2022. "Conical FDH Estimators of General Technologies, with Applications to Returns to Scale and Malmquist Productivity Indices," LIDAM Discussion Papers ISBA 2022024, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    4. Gao, Hongzhi & Ren, Monica & Shih, Tsui-Yii, 2023. "Co-evolutions in global decoupling: Learning from the global semiconductor industry," International Business Review, Elsevier, vol. 32(6).

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