empirical evaluation of factors determining vertical integration in U.S. food manufacturing industries

Vertical integration has become an important business strategy among food manufacturers because it allows them to manage and customize their production according to consumer needs. Economic theory has shown that vertical integration may be induced by transaction costs, demand variability, market pow...

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Bibliographic Details
Published inAgribusiness (New York, N.Y.) Vol. 21; no. 3; pp. 429 - 445
Main Author Bhuyan, S
Format Journal Article
LanguageEnglish
Published Hoboken Wiley Subscription Services, Inc., A Wiley Company 2005
John Wiley & Sons, Ltd
Wiley Periodicals Inc
SeriesAgribusiness
Subjects
Acquisitions & mergers
business management
consumer demand
cost analysis
Costs
Econometrics
Economic theory
Food
food industry
Food processing industry
food production
Food products
Hypotheses
Manufacturers
Manufacturing
Manufacturing industry
market power
monopoly
Studies
temporal variation
Vertical integration
Wholesaling
United States
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Summary:Vertical integration has become an important business strategy among food manufacturers because it allows them to manage and customize their production according to consumer needs. Economic theory has shown that vertical integration may be induced by transaction costs, demand variability, market power motives, and other factors. This paper presents an index of forward vertical integration for U.S. food manufacturing industries and uses an econometric analysis to examine the factors that motivate vertical integration in these industries. Empirical results indicate the role of both transaction cost factors and potential monopoly motives.
Bibliography:ark:/67375/WNG-9G70BNZV-H
ArticleID:AGR20056
istex:9B1444A39297FCC3B73185B3027F57DB64EFC092
ISSN:0742-4477
1520-6297
DOI:10.1002/agr.20056