Impact of Vertical Mergers on Industry Profitability: An Empirical Evaluation
Vertical integration has become an important business strategy to respond to the needs of a consumer-driven marketing system. Although one of the perceived benefits of vertical ownership integration is improved profitability of the integrated firm, empirical literature mostly ignores this issue. Usi...
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Published in | Review of industrial organization Vol. 20; no. 1; pp. 61 - 79 |
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Main Author | |
Format | Journal Article |
Language | English |
Published |
Boston
Kluwer Academic Publishers
01.02.2002
Springer Nature B.V |
Subjects | |
Online Access | Get full text |
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Summary: | Vertical integration has become an important business strategy to respond to the needs of a consumer-driven marketing system. Although one of the perceived benefits of vertical ownership integration is improved profitability of the integrated firm, empirical literature mostly ignores this issue. Using a sample of U.S. food manufacturing industries, this study examines the impact of vertical mergers on profitability. Findings show that vertical mergers negatively impact profits. This may be due to the failure of vertical mergers to create differential advantages, such as cost savings, for the integrated firm. |
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Bibliography: | ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23 |
ISSN: | 0889-938X 1573-7160 |
DOI: | 10.1023/A:1013310929902 |