Using the exogenous shock of the COVID-19 pandemic, we examine whether vertical integration creates value for firms when facing increasing uncertainty. We find that there is a significant and positive correlation between vertical integration and cumulative abnormal return in the event window of...

The role of contracting institutions, particularly the role of contract enforcement efficiency in shaping corporate vertical boundaries, has been largely overlooked. Using a quasi-natural experiment of “Announcement of Dishonest Persons” in China, we find that improved contract enforcement...