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Vertical organization of production and firm growth

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  • Fabio Pieri

Abstract

This paper empirically explores if different vertical organizational forms (i.e. vertical integration versus disintegration) give rise to unlike growth “behaviors” within the same industry. An econometric analysis is conducted in a sample of around 500 Italian machine tool (MT) builders for the period 1998–2007. Ceteris paribus, vertically integrated firms result to be characterized by a less dispersed distribution of growth rates than their disintegrated counterparts. By means of analyzing how different organizational forms map into the distribution of output growth rates, this work provides insight into the firm dynamics in a mature industry in which both vertically integrated and disintegrated firms coexist.

Suggested Citation

  • Fabio Pieri, 2018. "Vertical organization of production and firm growth," Industrial and Corporate Change, Oxford University Press, vol. 27(1), pages 83-106.
  • Handle: RePEc:oup:indcch:v:27:y:2018:i:1:p:83-106.
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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments

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