Do Prices Determine Vertical Integration? Evidence from Trade Policy

Laura Alfaro, Paola Conconi, Harald Fadinger, Andrew Newman, Sun, 10/28/2012

This paper shows that product prices determine organisational design by studying how trade policy affects vertical integration. The authors 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 organisational choices.

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Topics: Industrial organisation

Tags: property rights, industrial organisation, vertical integration