Micro-determinants of vertical integration: Evidence from China

Dan Huang () and Luxun Liu ()

Asia Pacific Journal of Management, 2014, vol. 31, issue 2, 377-396

Abstract: The state-of-the-art literatures, industrial economics, transaction cost theory, and real options theory explain vertical integration (VI) from the perspective of industrial characteristics. However, even within the same industry, VI greatly differs from firm to firm. This indicates that there may be firm-level (micro) determinants in VI. In an effort to probe into firm-level (micro) determinants of VI, we analyze data on the publicly listed firms of the electronics industry in China from 1998 to 2008. We find that between the two micro determinants, firm-oriented determinants consist of three groups of factors of value—profitability, growth, and risk—but insider-oriented determinants do not significantly impact VI. Copyright Springer Science+Business Media New York 2014

Keywords: Vertical integration; Firm-oriented determinant; Insider-oriented determinant; Empirical study; Electronics industry (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:kap:asiapa:v:31:y:2014:i:2:p:377-396

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DOI: 10.1007/s10490-012-9338-0

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