Impact of vertical mergers on industry profitability: An empirical evaluation

Research output: Contribution to journalArticle

17 Citations (Scopus)

Abstract

Vertical integration has become an important business strategy to respond to the needs of a consumer-driven marketing system. Although one of the perceived benefits of vertical ownership integration is improved profitability of the integrated firm, empirical literature mostly ignores this issue. Using a sample of U.S. food manufacturing industries, this study examines the impact of vertical mergers on profitability. Findings show that vertical mergers negatively impact profits. This may be due to the failure of vertical mergers to create differential advantages, such as cost savings, for the integrated firm.

Original languageEnglish (US)
Pages (from-to)61-79
Number of pages19
JournalReview of Industrial Organization
Volume20
Issue number1
DOIs
StatePublished - Jan 1 2002

Fingerprint

Profitability
Industry
Marketing
Industry profitability
Vertical merger
Empirical evaluation
Costs
Integrated
Cost savings
Manufacturing industries
Marketing systems
Industry studies
Perceived benefits
Vertical integration
Profit
Business strategy
Food manufacturing
Ownership

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation

Keywords

  • Industry profitability
  • Market performance
  • Mergers
  • Vertical integration

Cite this

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Impact of vertical mergers on industry profitability : An empirical evaluation. / Bhuyan, Sanjib.

In: Review of Industrial Organization, Vol. 20, No. 1, 01.01.2002, p. 61-79.

Research output: Contribution to journalArticle

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