Friebel, Guido; Raith, Michael - C.E.P.R. Discussion Papers - 2006
leads to weaker incentives for effort, compared with non-integration. Our theory makes minimal assumptions about the …We develop a theory of firm scope in which integrating two firms into one facilitates the allocation of resources, but … division managers. The division managers' job is to create profitable investment projects. Giving the managers incentives to do …