Market Structure and Organizational Form

Haiwen Zhou

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies the determinants of a firm’s organizational form in the context of an imperfectly competitive industry. There are two kinds of organizational forms: the multi-divisional form (M-form) and the unitary form (U-form). An M-form firm suffers from ignorance of demand externalities among different products and double marginalization is eliminated. In contrast, in a U-form firm, demand externalities are taken into consideration and double marginalization exists. A firm’s optimal choice of organizational form depends on the market structure.

Keywords: Organizational form; market structure; oligopoly; multi-divisional form; unitary form (search for similar items in EconPapers)
JEL-codes: D43 L13 L23 (search for similar items in EconPapers)
Date: 2019-11-08
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind and nep-ore
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Published in Southern Economic Journal 4.71(2005): pp. 705-719

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