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Upstream-Downstream Specialization by Integrated Firms in a Partially Integrated Industry

Author

Listed:
  • Gaudet, Gerard
  • Long, Ngo Van
  • Soubeyran, Antoine

Abstract

We propose a simple model of a partially integrated industry which explicitly takes into account persistent production cost differences across upstream firms, such as one might observe in natural resource industries. The model allows us to highlight the respective roles of strategic considerations and of cost considerations in the determination of an integrated firm's interaction with the non- integrated sector of the industry and, in the end, on its relative upstream-downstream specialization. Stylized facts from the world oil industry are used to illustrate the type of behaviour one might expect in this context.

Suggested Citation

  • Gaudet, Gerard & Long, Ngo Van & Soubeyran, Antoine, 1996. "Upstream-Downstream Specialization by Integrated Firms in a Partially Integrated Industry," Cahiers de recherche 9604, Université Laval - Département d'économique.
    • Handle: RePEc:lvl:laeccr:9604
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    Cited by:

    1. Ioannis N. Pinopoulos, 2017. "Upstream horizontal mergers and vertical integration," Discussion Paper Series 2017_07, Department of Economics, University of Macedonia, revised Aug 2017.
    2. Ivan Dufeu, 2004. "Market Size and Vertical Equilibrium in the Context of Successive Cournot Oligopolies," Working Papers hal-00581571, HAL.
    3. Singer, Marcos & Donoso, Patricio, 2008. "Upstream or downstream in the value chain?," Journal of Business Research, Elsevier, vol. 61(6), pages 669-677, June.
    4. Arunanondchai, May, 2001. "Can Indonesia Gain from Log Export Barriers?," The Warwick Economics Research Paper Series (TWERPS) 619, University of Warwick, Department of Economics.
    5. Rodrigo Barraza & Juan M. Sepúlveda & Ivan Derpich, 2022. "Location of the Intermediate Echelon to Add Purchase Value and Sustainability Criteria in a Mining Supply Network," Sustainability, MDPI, vol. 14(19), pages 1-14, October.
    6. Arunanondchai, May, "undated". "Can Indonesia Gain from Log Export Barriers?," Economic Research Papers 269389, University of Warwick - Department of Economics.

    More about this item

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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