IIFET Home Page
IIFET 2000 Home Page


Vertical Integration and Performance

By John R. Isaksen and Bent Dreyer

ABSTRACT

The effect of vertical integration (VI) on performance is an often-addressed topic in both management and economic studies. The contradicting conclusions based on different theoretical perspectives regarding how VI influences performance cause need for empirical studies. Empirical work, however, has lagged behind. In fact, few studies have in a convincing way demonstrated how VI affects performance.

The barriers in conducting empirical studies of VI are multiple. The main purpose of this paper is to demonstrate ways of overcoming the difficulties facing empirical studies of VI. The chosen empirical setting is the Norwegian fish processing industry. We examine to what extent VI is implemented in this industry, mainly upstream, towards the fishing fleet. The economic effect of VI is addressed and various motives for integrating vertically in the Norwegian fish processing industry are investigated.

The paper is organised in four sections. Introductorily, the purpose of the paper and the chosen approach are presented. In the second, a review of the literature on VI is performed, regarding both theory and empirical findings. The next section presents the setting and the data. In the fourth we argue for the measurements chosen regarding both VI and performance. Further we propose some empirical hypothesis to be tested. The paper concludes by presenting the result of the tests carried out, and by discussing the implications of our findings.

KEYWORDS: Vertical integration, economic performance, Norwegian fish processing industry


 View Market Structure, Conduct, and Performance Session

 View Full Paper (PDF file)

  Instructions for authors
  Conference Program
  Contact us
  IIFET 2000 Web Menu


return to top