Skip to main content
SpringerLink
Log in

Vertical Integration

  • Living reference work entry
  • Latest version View entry history
  • First Online:
The New Palgrave Dictionary of Economics

Abstract

Modern economics takes a two-way approach to vertical integration. The theory of the firm approach focuses on how the unified control of successive production and distribution processes changes investment incentives, while the industrial organization approach studies how vertical integration affects the exercise of market power.

This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution

Institutional subscriptions

Bibliography

  • Arrow, K.J. 1975. Vertical integration and communication. Bell Journal of Economics 6: 173–183.

    Article  Google Scholar 

  • Bolton, P., and M.D. Whinston. 1993. Incomplete contracts, vertical integration, and supply assurance. Review of Economic Studies 60: 121–148.

    Article  Google Scholar 

  • Bork, R.H. 1978. The antitrust paradox: A policy at war with itself. New York: Basic Books.

    Google Scholar 

  • Chen, Y., and M.H. Riordan. 2007. Vertical integration, exclusive dealing, and ex post cartelization. RAND Journal of Economics 38: 1–21.

    Article  Google Scholar 

  • Coase, R.H. 1937. The nature of the firm. Economica 4: 386–405.

    Article  Google Scholar 

  • Grossman, S.J., and O.D. Hart. 1986. The costs and benefits of ownership: A theory of vertical and lateral integration. Journal of Political Economy 94: 691–719.

    Article  Google Scholar 

  • Hart, O. 1995. Firms, contracts and financial structure. New York: Oxford University Press.

    Book  Google Scholar 

  • Hart, O., and J. Moore. 1990. Property rights and the nature of the firm. Journal of Political Economy 98: 1119–1158.

    Article  Google Scholar 

  • Hart, O. and Tirole, J. 1990. Vertical integration and market foreclosure. Brookings papers on economic activity: Microeconomics, 205–276.

    Google Scholar 

  • Klein, B., R.A. Crawford, and A.A. Alchian. 1978. Vertical integration, appropriable rents, and the competitive contracting process. Journal of Law and Economics 21: 297–326.

    Article  Google Scholar 

  • Ordover, J.A., G. Saloner, and S.C. Salop. 1990. Equilibrium vertical foreclosure. American Economic Review 80: 127–142.

    Google Scholar 

  • Perry, M.K. 1989. Vertical integration: Determinants and effects. In Handbook of industrial organization, vol. 1, ed. R. Schmalensee and R. Willig. Amstersdam: North-Holland.

    Google Scholar 

  • Rey, P. and Tirole, J. 2007. A primer on foreclosure. In Handbook of industrial organization, vol. 3, ed. M. Armstrong and R.H. Porter. Amsterdam: North-Holland.

    Google Scholar 

  • Riordan, M.H. 1990. What is vertical integration? In The firm as a nexus of treaties, ed. M. Aoki, B. Gustafsson, and O.E. Williamson. London: Sage.

    Google Scholar 

  • Riordan, M.H. 1998. Anticompetitive vertical integration by a dominant firm. American Economic Review 88: 1232–1248.

    Google Scholar 

  • Riordan, M.H., and S.C. Salop. 1995. Evaluating vertical mergers: A post-Chicago approach. Antitrust Law Journal 63: 513–568.

    Google Scholar 

  • Riordan, M.H., and O.E. Williamson. 1985. Asset specificity and economic organization. International Journal of Industrial Organization 3: 365–378.

    Article  Google Scholar 

  • Salinger, M.A. 1988. Vertical mergers and market foreclosure. Quarterly Journal of Economics 103: 345–356.

    Article  Google Scholar 

  • Salop, S.C., and D.T. Scheffman. 1987. Cost-raising strategies. Journal of Industrial Economics 36: 19–34.

    Article  Google Scholar 

  • Shelanski, H.A., and P.G. Klein. 1995. Empirical research in transaction cost economics: review and assessment. Journal of Law, Economics, and Organization 11: 335–361.

    Google Scholar 

  • Whinston, M.D. 2003. Transaction cost determinants of vertical integration. Journal of Law, Economics, and Organization 19: 1–23.

    Article  Google Scholar 

  • Williamson, O.E. 1975. Markets and hierarchies: Analysis and antitrust implications. New York: Free Press.

    Google Scholar 

  • Williamson, O.E. 1985. The economic institutions of capital. New York: Free Press.

    Google Scholar 

  • Williamson, O.E. 1996. The mechanisms of Governance. New York: Oxford University Press.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. http://link.springer.com/referencework/10.1057/978-1-349-95121-5

    Michael H. Riordan

Authors
  1. Michael H. Riordan
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

    Copyright information

    © 2008 The Author(s)

    About this entry

    Cite this entry

    Riordan, M.H. (2008). Vertical Integration. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_1698-2

    Download citation

    • DOI: https://doi.org/10.1057/978-1-349-95121-5_1698-2

    • Received:

    • Accepted:

    • Published:

    • Publisher Name: Palgrave Macmillan, London

    • Online ISBN: 978-1-349-95121-5

    • eBook Packages: Springer Reference Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences

    Publish with us

    Policies and ethics

    Chapter history

    1. Latest

      Vertical Integration
      Published:
      25 March 2017

      DOI: https://doi.org/10.1057/978-1-349-95121-5_1698-2

    2. Original

      Vertical Integration
      Published:
      27 November 2016

      DOI: https://doi.org/10.1057/978-1-349-95121-5_1698-1

    Search

    Navigation