A PRICE THEORY OF VERTICAL AND LATERAL INTEGRATION

• 成果类型: Article
• 署名作者: Legros, Patrick; Newman, Andrew F.
• 署名单位: Universite Libre de Bruxelles; Boston University
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1093/qje/qjs075
• 发表日期: 2013
• 页码: 725-770
• 关键词: PROPERTY-RIGHTS; MARKET; firm; COMPETITION; incentives; governance; OWNERSHIP; COSTS

摘要

This article presents a perfectly competitive model of firm boundary decisions and study their interplay with product demand, technology, and welfare. Integration is privately costly but is effective at coordinating production decisions; nonintegration is less costly but coordinates relatively poorly. Output price influences the choice of ownership structure: integration increases with the price level. At the same time, ownership affects output, because integration is more productive than nonintegration. For a generic set of demand functions, equilibrium delivers heterogeneity of ownership and performance among ex ante identical enterprises. The price mechanism transmutes demand shifts into industry-wide reorganizations and generates external effects from technological shocks: productivity changes in some firms may induce ownership changes in others. If the enterprise managers have full title to its revenues, market equilibrium ownership structures are second-best efficient. When managers have less than full revenue claims, equilibrium can be inefficient, with too little integration. JEL Codes: D21, D23, D41, L11, L14, L22.