Geographical Agglomeration as an Alternative to Vertical Integration

Geographical Agglomeration as an Alternative to Vertical Integration This paper provides empirical evidence of the relationship between agglomeration and vertical integration decisions. It contributes to the existing literature by first developing a conceptual framework that focuses on both opportunism risk and communication problems to explain how physical proximity among firms can be an alternative to internal organization. Second, this study tests this relationship through the use of firm-level data from 10,955 establishments in the Spanish meat industry. Results confirm that establishments located in agglomerated areas internally undertake fewer stages of the value chain. We also find that this relationship is weaker than expected and fades at distances greater than 2.5 km, which may be explained by the particular characteristics of this industry. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Geographical Agglomeration as an Alternative to Vertical Integration

Loading next page...
 
/lp/springer_journal/geographical-agglomeration-as-an-alternative-to-vertical-integration-nqJfPkLbMR
Publisher
Springer Journals
Copyright
Copyright © 2010 by Springer Science+Business Media, LLC.
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-010-9251-y
Publisher site
See Article on Publisher Site

Abstract

This paper provides empirical evidence of the relationship between agglomeration and vertical integration decisions. It contributes to the existing literature by first developing a conceptual framework that focuses on both opportunism risk and communication problems to explain how physical proximity among firms can be an alternative to internal organization. Second, this study tests this relationship through the use of firm-level data from 10,955 establishments in the Spanish meat industry. Results confirm that establishments located in agglomerated areas internally undertake fewer stages of the value chain. We also find that this relationship is weaker than expected and fades at distances greater than 2.5 km, which may be explained by the particular characteristics of this industry.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Jun 11, 2010

References

  • Evidence on the role of firm capabilities in vertical integration decisions
    Argyres, N.
  • Knowledge flows through informal contacts in industrial clusters: Myth or reality?
    Dahl, M. S.; Pedersen, C. O. R.

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create lists to
organize your research

Export lists, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off