Impact of vertical mergers on industry profitability: An empirical evaluation

Research output: Contribution to journalArticle

17 Scopus citations


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
Issue number1
StatePublished - Jan 1 2002
Externally publishedYes

All Science Journal Classification (ASJC) codes

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


  • Industry profitability
  • Market performance
  • Mergers
  • Vertical integration

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