EconPapers    
Economics at your fingertips  
 

Vertical integration and supplier finance

Erasmus Kersting () and Holger Görg

No 1894, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: We investigate the financial implications of a multinational firm's choice between outsourcing and integration from the perspective of the supplier. Using a simple model, we explore the extent to which an integrated supplier's access to finance, as well as its sources of funding, change relative to a firm supplying a multinational at arm's-length. The model predicts that integrated firms have better access to finance and cover a larger share of their costs using internal funds. Furthermore, improvements in a host country's level of financial development have less of an impact on the financial situation of integrated suppliers. We present empirical evidence from firm-level data for over 60 countries broadly supporting the predictions.

Keywords: Vertical Integration; Financial Constraints; Multinational companies (search for similar items in EconPapers)
JEL-codes: F23 G32 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/90628/1/776824619.pdf (application/pdf)

Related works:
Journal Article: Vertical integration and supplier finance (2017) Downloads
Journal Article: Vertical integration and supplier finance (2017) Downloads
Working Paper: Vertical integration and supplier finance (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1894

Access Statistics for this paper

More papers in Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

 
Page updated 2025-03-20
Handle: RePEc:zbw:ifwkwp:1894