What Determines Vertical Mergers in U.S. Food Manufacturing Industries?

Vertical mergers have become an important business strategy among food manufacturers because it allows them to manage and customize their production according to consumer needs. Economic theories have shown that vertical mergers may be induced by transaction costs, demand variability, and other factors. Using an input-output methodology, a measure of vertical merger is developed for U.S. food manufacturing industries and the transaction cost hypotheses tested in an attempt to examine the factors that motivate vertical mergers in the food manufacturing industries. The results are consistent with previous studies that confirm the role of transaction cost factors, such as lock-in effects in terms of asset specificity and managerial diseconomies.


Subject(s):
Issue Date:
2003
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/22146
Total Pages:
15
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2017-08-24

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