Improving performance through vertical disintegration: evidence from UK manufacturing firms
Unlike previous work on the vertical integration-performance relationship, we investigate the performance consequences of vertical disintegration. We offer a theoretical justification for the disintegration decision and we condition the disintegration effect on performance on the initial degree of firm integration, the timing and the direction of disintegration. Using a sample of UK manufacturing firms and controlling for disintegration endogeneity, we find that disintegration eventually results in improved operating performance, particularly when disintegration occurs as a reaction to poor performance and in cases of forward between-sector disintegration. However, being highly integrated does not guarantee gains from disintegration. The implications of these findings are discussed. Copyright © 2008 John Wiley & Sons, Ltd.
Year of publication: |
2009
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Authors: | Desyllas, Panos |
Published in: |
Managerial and Decision Economics. - John Wiley & Sons, Ltd., ISSN 0143-6570. - Vol. 30.2009, 5, p. 307-324
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Publisher: |
John Wiley & Sons, Ltd. |
Saved in:
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