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Vertical integration by oil-exporting countries

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Intereconomics

Abstract

Most oil-producing countries have now nationalised their oil reserves and are pursuing their own pricing and marketing policies; in recent years some of them have attempted to extend their influence over the oil market by undertaking processing activities downstream from oil production. What motives underlie this strategy of vertical integration? What is its economic justification? What effects will it have on oil-importing countries?

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References

  1. See M. Quinlan: World Survey, Chemicals: Profits Continue to Decline, in: Petroleum Economist, No. 50, 1983, pp. 261–263.

  2. For a good synopsis, see R. D. Blair, D. L. Kaserman: Law and Economics of Vertical Integration and Control, New York and London 1983; M. Casson: The Theory of Vertical Integration: A Survey and Synthesis, Journal of Economic Studies, No. 11, 1984, pp. 3–43.

  3. With regard to the transaction cost approach, see O. E. Williamson: Assessing Vertical Market Restrictions: Antitrust Ramifications of the Transaction Cost Approach, in: University of Pennsylvania Law Review, No. 127, 1979, pp. 1479–1496.

  4. Cf. H. Razavi, F. Fesharaki: OPEC's Push into Refining: Dilemma of Interactions between Crude and Product Markets, in: Energy Policy, No. 12, 1984, pp. 125–134.

  5. H. Siebert: Economics of the Resource-Exporting Country, Greenwich (Conn.) 1985.

  6. W. Isard: Methods of Regional Analysis: An Introduction to Regional Science, Cambridge 1960, pp. 375 f.

  7. Cf. M. Quinlan, op. cit., World Survey, Chemicals: Profits Continue to Decline, in: Petroleum Economist, No. 50, 1983, pp. 261.

  8. With regard to the following remarks, see F. Fesharaki and D. Isaak: OPEC and the World Refining Crisis, Economist Intelligence Unit Special Report Nr. 168, London 1984; R. Vielvoye: Future Gloomy for Refining Industry in Western Europe, in: Oil and Gas Journal, 18th March 1985, pp. 41–46; V. Baum: West Germany: Oil Industry's Continuing Troubles, in: Petroleum Economist, No. 52, 1985, pp. 125 f.; H. K. Schneider, D. Schmitt, H. J. Schürmann: Daten zur Kosten- und Ertragslage der Mineralölindustrie in der Bundesrepublik Deutschland im Jahre 1984, in: Zeitschrift für Energiewirtschaft, Special Issue 1/1985.

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Authors and Affiliations

  1. University of Konstanz, Konstanz

    Horst Siebert & Michael Rauscher

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  1. Horst Siebert
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  2. Michael Rauscher
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This paper was produced as part of the research project “Resources policy for industrial countries” by Special Research Division 5 (Sonderforschungsbereich 5) “State resource allocation policies in market economies”.

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Siebert, H., Rauscher, M. Vertical integration by oil-exporting countries. Intereconomics 20, 211–216 (1985). https://doi.org/10.1007/BF02926966

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