Giacomo Negro and Olav Sorenson
We investigate the competitive consequence of vertical integration on organizational performance using a comprehensive dataset of U.S. motion picture production companies, which includes information on their vertical scope and competitive overlaps. Vertical integration appears to change the dynamics of competition in two ways: (i) it buffers the vertically integrated ﬁrms from environmental dependence and (ii) it intensiﬁes competition among non-integrated organizations. In contrast to the existing literature, our results suggest that vertical integration has implications well beyond both the level of the individual transaction and even the internal efﬁciency of the integrated ﬁrm.
Advances in Strategic Management, 23 (2006): 367-403