Bridging Institutional Gaps: Market Segmentation, Management Models, and the Performance Mechanism of Horizontal Integration Strategies

Zhaoting Yu ()
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Zhaoting Yu: London School of Economics and Political Science

A chapter in Proceedings of the 2026 11th International Conference on Social Sciences and Economic Development (ICSSED 2026), 2026, pp 512-519 from Springer

Abstract: Abstract This study examines how horizontal integration strategies shape firm performance in the context of China’s simultaneous economic globalisation and domestic market segmentation. Drawing on survey data from 129 firms operating across regions, it develops a theoretical model based on the Integration-Responsiveness (IR) framework to analyse the performance effects of national integration and localisation strategies, as well as the moderating roles of market segmentation and management models. The findings indicate that both integration and localisation strategies positively influence firm performance, but through distinct organisational mechanisms. Management models significantly condition these effects: centralisation and headquarters-linked incentives strengthen the performance outcomes of integration strategies, whereas decentralisation and local incentive systems enhance the performance outcomes of localisation strategies. Institutional distance weakens the positive impact of integration strategies, while showing no significant effect on localisation strategies. The study contributes by extending the IR framework to a domestic emerging-economy context and by clarifying the interaction between institutional conditions and organisational design. In practice, it provides guidance for firms seeking to navigate market segmentation and optimise their horizontal integration strategies.

Keywords: Horizontal Integration; Market Segmentation; Management Model; Integration Strategy; Localization Strategy (search for similar items in EconPapers)
Date: 2026
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DOI: 10.2991/978-94-6239-701-9_52

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