Do prices determine vertical integration?
Laura Alfaro
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Do prices determine vertical integration?
by Laura Alfaro
Published
2013
Publisher
Harvard Business School
Pages
42
Description
This paper shows that product prices determine organizational design by studying how trade policy affects vertical integration. Property rights theory asserts that firm boundaries are chosen by stakeholders to mediate organizational goals (e.g., profits) and private benefits (e.g., operating in preferred ways). We present an incomplete-contracts model in which vertical integration raises output at the expense of lower private benefits. A key implication is that higher prices should result in more integration, since the organizational goal becomes relatively more valuable than private benefits. Trade policy provides a source of exogenous price variation to test this proposition: higher tariffs should lead to more vertical integration; moreover, ownership structures should be more alike across countries with similar levels of protection. To assess the evidence, we construct firm-level indices of vertical integration for a large set of countries and industries and exploit cross-section and time-series variation in import tariffs to examine the impact of prices on organizational choices. Our empirical results provide strong support for the predictions of the model.
Frequently Asked Questions
How many pages are in Do prices determine vertical integration??
This edition of Do prices determine vertical integration? has approximately 42 pages. Please note, this is an estimate and the exact page count can vary between hardcover, paperback, and e-book versions.
How long does it take to read Do prices determine vertical integration??
For most readers, Do prices determine vertical integration? typically takes between 53m and 35m to complete. This is based on the book's length of approximately 10,500 words and common reading speeds.
Here's a detailed breakdown: • Continuous reading at 250 WPM: approximately 42m of focused reading • Casual reading (30 minutes/day): you could finish in roughly 2 days • Estimated word count: 10,500 words
Your individual reading time will vary based on your personal reading pace, the amount of daily reading time, and your familiarity with the subject matter.
What is the word count of Do prices determine vertical integration??
The estimated word count for Do prices determine vertical integration? is approximately 10,500 words. This figure is calculated using industry-standard methods that consider genre-specific word density patterns, typical formatting and layout characteristics, and standard words-per-page ratios for published books.
This is an approximation — actual word count may vary based on font size, formatting, edition, and the presence of illustrations or charts.
Who is the author of Do prices determine vertical integration??
Do prices determine vertical integration? was written by Laura Alfaro.
When was Do prices determine vertical integration? published?
The publication date for this specific edition is 2013. The original work may have been published on a different date.