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The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration

Grossman, Sanford J; Hart, Oliver - C.E.P.R. Discussion Papers - 1985

What determines how integrated a firm is? We emphasize the benefits of "control" when there are difficulties in writing complete contracts. We define the firm as being composed of its assets. We present a theory of costly contracts which emphasizes that contractual rights can be of two types:...

Persistent link: https://www.econbiz.de/10005497709

Power in a Theory of the Firm

Rajan, Raghuram G; Zingales, Luigi - C.E.P.R. Discussion Papers - 1998

Transactions take place in the firm rather than in the market because the firm offers agents who make specific investments power. Past literature emphasizes the allocation of ownership as the primary mechanism by which the firm does this. Within the contractibility assumptions of this...

Persistent link: https://www.econbiz.de/10005498046

Do Prices Determine Vertical Integration? Evidence from Trade Policy

Alfaro, Laura; Conconi, Paola; Fadinger, Harald; … - C.E.P.R. Discussion Papers - 2012

industrial organization posit that integration, while costly, increases productivity. If true, it follows from firms' maximizing … resulting from enhanced productivity are too small to justify the cost, whereas at higher prices, the revenue benefits exceeds …

Persistent link: https://www.econbiz.de/10011084043

Financial Constraints and the Costs and Benefits of Vertical Integration

Macchiavello, Rocco - C.E.P.R. Discussion Papers - 2007

Does vertical integration reduce or increase transaction costs with external investors? This paper analyzes an incomplete contracts model of vertical integration in which a seller and a buyer with no cash need to finance investments for production. The firm is modeled as a "nexus of contracts"...

Persistent link: https://www.econbiz.de/10005661896

Relational Contracts and Property Rights

Blonski, Matthias; Spagnolo, Giancarlo - C.E.P.R. Discussion Papers - 2002

We propose a general framework for analyzing and comparing ownership structures with respect to creating incentives for co-operative behavior (e.g. efficient investment) in long-run relationships. We generalize models by Garvey (1995), Halonen (2002), and Baker, Gibbons and Murphy (2002) and...

Persistent link: https://www.econbiz.de/10005792045

Competing in Organizations: Firm Heterogeneity and International Trade

Marin, Dalia; Verdier, Thierry - C.E.P.R. Discussion Papers - 2007

determine heterogeneity across firms in size and productivity in the same industry. We then incorporate these organisational … increase in aggregate productivity of an industry depending on which of these margins dominate. Trade may trigger firms to opt …

Persistent link: https://www.econbiz.de/10005791677

Multinationals' Productivity Advantage: Scale or Technology

Girma, Sourafel; Görg, Holger - C.E.P.R. Discussion Papers - 2006

The first aim of this paper is to decompose the productivity advantage of foreign multinationals into two components … two components of productivity growth. We do so by analyzing the effects of an acquisition of a domestic establishment by … a foreign multinational enterprise, using a combined propensity score matching and difference-in-differences estimation …

Persistent link: https://www.econbiz.de/10005123535

Who Integrates?

Bühler, Stefan; Schmutzler, Armin - C.E.P.R. Discussion Papers - 2003

We examine vertical backward integration in oligopoly. Analysing a standard linear Cournot model, we find that for wide parameter ranges (i) some firms integrate, while others remain separated, and (ii) efficient firms are more likely to integrate vertically. Adopting a reduced-form approach, we...

Persistent link: https://www.econbiz.de/10005504590

Downstream Competition, Foreclosure, and Vertical Integration

Chemla, Gilles - C.E.P.R. Discussion Papers - 2000

This paper analyses the impact of competition among downstream firms on an upstream firm's payoff and on its incentive to vertically integrate when firms on both segments negotiate optimal contracts. We argue that tougher competition decreases the downstream industry profit, but improves the...

Persistent link: https://www.econbiz.de/10005497922

Foreclosure with Incomplete Information

White, Lucy - C.E.P.R. Discussion Papers - 2003

We investigate the robustness of the new foreclosure doctrine and its associated welfare implications to the introduction of incomplete information. In particular, we let the upstream firm’s marginal cost be private information, unknown to the downstream firms. The previous literature has...

Persistent link: https://www.econbiz.de/10005498007