Empirical evidence shows that vertically integrated producers are more productive, bigger and are matched to better suppliers (with high productivity and size). I present a dynamic stochastic model of an industry with heterogeneous firms interacting as buyers and sellers, and market frictions...

Contractual inefficiencies within supply chains increase an input price above its marginal cost, therefore they are considered detrimental to consumer surplus. We argue that such inefficiencies may be beneficial to consumers in quality-differentiated markets. Indeed, enhancing contractual...

Today in the British electricity industry, most electricity suppliers hedge a large proportion of their residential customer base requirements by owning their own plant. The non-storability of electricity and the corresponding need for an instantaneous matching of generation and consumption...

This study analyzes the impact of international trade on the diffusion of flexible manufacturing in a general equilibrium framework. Suppliers produce a flexible base product that can be adapted to the specific input requirements of a continuum of downstream industries. The vertical structure is...

Which firms find it optimal to integrate their input suppliers into the firm boundaries of control (vertical integration)? Which firms choose to expand their sourcing activities across the national border (offshoring)? This letter provides novel evidence on these questions based on a Spanish...

We investigate the incentives for vertical or horizontal integration in the financial security service industry, consisting of trading, clearing and settlement. We thereby focus on firms' decisions but also look on the implications of these decisions on competition and welfare. Our analysis...

We analyze the sourcing strategies of firms active in the Spanish manufacturing sector. We show that firms that select strategies of vertical integration and of foreign sourcing ex post tend to have been more productive, ex ante, than other firms.

We study how the vertical industry structure affects investment in network quality and social welfare, with a focus on the prospective deployment of high-speed broadband access networks (the so-called NGA). We model pros and cons of vertical separation, namely, pro-competitive effects and loss...

Vertical restraints most often arise when an upstream firm wants to restrict the choices of a downstream distributor in order to increase profits. The aim of this paper is to analyze some empirical regularities in the motivations for vertical restraints. Firstly a simple theoretical framework is...

This paper contains an analysis of stylised natural gas and electricity supply sectors. Power plants operate either on natural gas or on a competing fuel – e.g. oil. The competing fuel is assumed to be traded at world market price whereas natural gas is sold by a national monopoly. The paper...