IDEAS home Printed from
   My bibliography  Save this article

Vertical Ownership and Export Performance: Firm-Level Evidence from the Food Industry


  • Carl Gaigné
  • Karine Latouche
  • Stéphane Turolla


This article examines whether ownership arrangements between food firms and intermediaries improve the export performance of the former. We develop a theoretical model of trade with vertically-linked industries whereby upstream manufacturers compete in export markets and may decide to acquire ownership stakes in an intermediary. The model highlights how more productive firms succeed in managing the double marginalization problem and in reducing the costs of exporting through forward acquisition. The predictions from the model are tested using firm-level data on the French food industry. The results demonstrate that acquiring an intermediary lowers prices and distribution costs, and reveal that the benefits from forward acquisitions can be quite large. Conversely, we find that vertical ownership creates a market externality among manufacturers due to the reallocation of market shares from small firms to large firms, thereby forcing some low-productivity firms to exit foreign markets.

Suggested Citation

  • Carl Gaigné & Karine Latouche & Stéphane Turolla, 2018. "Vertical Ownership and Export Performance: Firm-Level Evidence from the Food Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(1), pages 46-72.
  • Handle: RePEc:oup:ajagec:v:100:y:2018:i:1:p:46-72.

    Download full text from publisher

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:ajagec:v:100:y:2018:i:1:p:46-72.. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.