Technical Dialog as an Incentive for Vertical Integration in the Semiconductor Industry

Kirk Monteverde
Additional contact information
Kirk Monteverde: St. Joseph's University, Philadelphia, Pennsylvania 19131

Management Science, 1995, vol. 41, issue 10, 1624-1638

Abstract: A curious structural change observed in the American semiconductor industry (the appearance of a class of "fabless" firms) is examined within a general transaction costs framework. The framework is refined for empirical application with the introduction of the construct "unstructured technical dialog." The necessary level of this form of interpersonal communication between engineers in the design and fabrication stages of production is hypothesized to be positively related to the efficiency of a vertically integrated structure in which both stages are organized under a single hierarchy "Fablessness" (i.e., the organizational separation of the design and fabrication stages) is argued to be efficient for only those firms whose particular product portfolios have only a minimal requirement for such unstructured technical dialog. The hypothesis is tested upon a set of relatively young semiconductor firms. Support is found for the theoretically derived relationship even after controlling for rival explanations found in the literature.

Keywords: transaction costs; Fabless semiconductor firms; technical dialog; vertical integration (search for similar items in EconPapers)
Date: 1995
References: Add references at CitEc
Citations: View citations in EconPapers (64)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.41.10.1624 (application/pdf)

Related works:
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:inm:ormnsc:v:41:y:1995:i:10:p:1624-1638

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().