Affiliation, integration, and information: ownership incentives and industry structure

Thomas N. Hubbard

Journal of Industrial Economics, 2004, vol. 52, issue 2, 201-227

Abstract: This paper presents theory and evidence on horizontal industry structure. At issue is the question: what makes industries necessarily fragmented? The theoretical model examines trade‐offs associated with affiliation and integration, and how they are affected by the contracting environment. I show how contractual incompleteness can lead industries to be necessarily fragmented. I also show that contractual improvements will tend to lead to a greater concentration of brands, but whether they lead industries to be more or less concentrated depends on what becomes contractible. I then discuss the propositions generated by the model through a series of case study examples.

Date: 2004
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https://doi.org/10.1111/j.0022-1821.2004.00223.x

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Journal of Industrial Economics is currently edited by Pierre Regibeau, Yeon-Koo Che, Kenneth Corts, Thomas Hubbard, Patrick Legros and Frank Verboven

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