Upstream-Downstream Specialization by Integrated Firms in a Partially Integrated Industry

Gérard Gaudet, Ngo Long and Antoine Soubeyran

Cahiers de recherche from Université Laval - Département d'économique

Abstract: We propose a simple model of a partially integrated industry which explicitly takes into account persistent production cost differences across upstream firms, such as one might observe in natural resource industries. The model allows us to highlight the respective roles of strategic considerations and of cost considerations in the determination of an integrated firm's interaction with the non- integrated sector of the industry and, in the end, on its relative upstream-downstream specialization. Stylized facts from the world oil industry are used to illustrate the type of behaviour one might expect in this context.

Date: 1996
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Related works:
Journal Article: Upstream-Downstream Specialization by Integrated Firms in a Partially Integrated Industry (1999)
Working Paper: Upstream Downstream Specialization by Integrated Firms in a Partially Integrated Industry (1996)
Working Paper: Upstream-Downstream Specialization by Integrated Firms in a Partially Integraded Industry (1996)
Working Paper: Upstream-Downstream Specialization by Integrated Firms in a Partially Integrated Industry (1996)
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