Market Structure and Organizational Form

Haiwen Zhou

Southern Economic Journal, 2005, vol. 71, issue 4, 705-719

Abstract: This article 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 multidivisional 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.

Date: 2005
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https://doi.org/10.1002/j.2325-8012.2005.tb00671.x

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Working Paper: Market Structure and Organizational Form (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:71:y:2005:i:4:p:705-719

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