Monopoly, Vertical Integration and Efficiency: A Study of Courtaulds

Keith Cowling

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: This paper examines the evolution of Courtaulds into its dominant position in the U.K. market for rayon and textiles and the ensuing consequences in terms of market power and efficiency. The first part of the paper deals with the emergence of the U.K. rayon monopoly, paying particular attention to the merger of Courtaulds with its rival British Celanese. The second part of the paper is devoted to an examination of the impact on the textile industry and its efficiency of the series of acquisitions of textile firms by Courtaulds in the 1960’s and early 1970’s. In both cases the conclusion has to be that although economic power has been considerably enhanced there is no indication of increased efficiency resulting from these acquisitions but there have been transitional losses. The paper also highlights the considerable interaction between Courtaulds and the state in this process of growth by external acquisition.

Pages: 43 pages
Date: 1978
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:137

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