Where legal systems and market forces enforce contracts inadequately, vertical integration can circumvent these transaction difficulties. But, such environments often also feature highly interventionist government, and even corruption. Vertical integration might then enhance returns to political...

We investigate inter-industry variation in the relative incidence of advertisers' utilization of in-house rather than independent advertising agencies. To account for this variability, we develop a set of hypotheses drawing on two perspectives that figure prominently in the literature on...

Double marginalization causes inefficiencies in vertical markets. This paper argues that such inefficiencies may be beneficial to final consumers in markets producing vertically differentiated goods. The rationale behind this result is that enhancing efficiency in high-quality supply chains...

We analyze firms' decisions to adopt a vertical integrated or decentralized structure taking into account the characteristics of both the final good competition and the R&D process. We consider two vertical chains, where R&D is conducted by upstream sectors. R&D investment determines the...

This paper develops an equilibrium model of vertical foreclosure with the choice of input specifications. In this model, vertical foreclosure occurs as the upstream division of the integrated firm makes a specialized input for its sister downstream division while it would, as an independent...

This paper investigates the interrelationship between a firm's incentive to engage in international predatory pricing and its domestic vertical industry ties in the context of the deep-pocket theory of predation. The deep pocket stems from a vertically integrated firm's ability to shift funds...

This article provides a systematic analysis of the welfare effects of vertical integration by a monopolist input supplier into a monopolistically competitive downstream industry. We give sufficient conditions on consumer preferences that lead to Pareto-improving vertical integration and...

Vertical integration (ownership and contracts) is an integral part of the structural changes that are occurring in the U.S. food system. Because of its potential adverse effect on competition, vertical integration draws attention from public policy makers, industry and academia. We measure the...