Do Prices Determine Vertical Integration?

• 成果类型: Article
• 署名作者: Alfaro, Laura; Conconi, Paola; Fadinger, Harald; Newman, Andrew F.
• 署名单位: Harvard University; National Bureau of Economic Research; Universite Libre de Bruxelles; Center for Economic & Policy Research (CEPR); University of Mannheim; Boston University
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rdv059
• 发表日期: 2016
• 页码: 855-888
• 关键词: FOREIGN DIRECT-INVESTMENT; trade liberalization; asset ownership; incomplete contracts; lateral integration; multiproduct firms; empirical-evidence; political-economy; airline industry; job design

摘要

A number of theories in organizational economics and industrial organization suggest that vertical integration, while costly, increases productivity. It follows from firms' maximizing behaviour that higher prices in the product market ought to induce more integration. Trade policy provides a source of exogenous price variation to assess this prediction: higher tariffs should lead to higher prices and, therefore, to more integration. We construct firm-level vertical integration indices for a large set of countries and industries and exploit variation in applied most-favoured-nation tariffs to examine the impact of tariffs on firm boundaries. The empirical results provide strong support for the view that higher output prices generate more vertical integration. Our estimates of the average price elasticity of vertical integration are in the range 0.4-2.