Integration Contracts and Asset Complementarity: Evidence from US Data

We study the effects of ownership and complementarity on the performance of bilateral contracts (M&A, Minority Stake purchase and Joint Venture). We derive profitability conditions based on how a contract changes the asset control between partners and how this affects their position against competitors. Then we test our predictions on a sample of US firms. We build a multiproduct and time varying complementarity index in order to estimate the link between firms’ relationships within industry, and performance over time.