EconPapers    
Economics at your fingertips  
 

Vertical Integration and Technology: Theory and Evidence

Daron Acemoglu, Philippe Aghion, Rachel Griffith () and Fabrizio Zilibotti ()

Journal of the European Economic Association, 2010, vol. 8, issue 5, 989-1033

Abstract: We study the determinants of vertical integration. We first derive a number of predictions regarding the relationship between technology intensity and vertical integration from a simple incomplete contracts model. Then, we investigate these predictions using plant-level data for the UK manufacturing sector. Most importantly, and consistent with the theoretical predictions, we find that the technology intensity of downstream (producer) industries is positively correlated with the likelihood of integration whereas the intensity of upstream (supplier) industries is negatively correlated with it. Also consistent with theory, both correlations are stronger when the supplying industry accounts for a large fraction of the producer's costs. These results are generally robust and hold with alternative measures of technology intensity, with alternative estimation strategies, and with or without controlling for a number of firm- and industry-level characteristics. (JEL: L22, L23, L24, L60) (c) 2010 by the European Economic Association.

JEL-codes: L22 L23 L24 L60 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (79) Track citations by RSS feed

Downloads: (external link)
http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1542-4774/issues link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Vertical Integration and Technology: Theory and Evidence (2010) Downloads
Working Paper: Vertical Integration and Technology: Theory and Evidence (2007) Downloads
Working Paper: Vertical Integration and Technology: Theory and Evidence (2005) Downloads
Working Paper: Vertical integration and technology: theory and evidence (2004) Downloads
Working Paper: Vertical Integration and Technology: Theory and Evidence (2004) 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:tpr:jeurec:v:8:y:2010:i:5:p:989-1033

Ordering information: This journal article can be ordered from
http://www.mitpressjournals.org/jeea

Access Statistics for this article

Journal of the European Economic Association is currently edited by Xavier Vives, George-Marios Angeletos, Orazio P. Attanasio, Fabio Canova and Roberto Perotti

More articles in Journal of the European Economic Association from MIT Press
Bibliographic data for series maintained by Ann Olson ().

 
Page updated 2020-09-14
Handle: RePEc:tpr:jeurec:v:8:y:2010:i:5:p:989-1033