Organizing Global Value Chains - Differences in Contrary Cases of Firm Integration Open Access

Lade, Ravij (Summer 2024)

Permanent URL: https://etd.library.emory.edu/concern/etds/02870x23t?locale=en
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Abstract

Firm production strategy decisions shape the organization of the global value chains. We employ the property rights theory model assuming for sequentiality in production stages and contractual incompleteness to identify conditions determining firm preference for partial and complete integration. Using detailed firm-level data on Mergers and Acquisitions, we find the downstreamness of firms and the nature of supplier investments as principal estimators of firm preference for partial and complete integration. In particular, firms are more likely to partially integrate with relatively downstream suppliers. The relationship is inverted when stage-specific supplier investments are sequential complements. Additionally, downstream firms, as opposed to upstream firms, are more likely to partially integrate with suppliers when stage-specific supplier investments along the global value chain are sequential complements.

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Introduction Theoretical Framework Empirical Strategy & Key Variables Empirical Findings Conclusion Appendix References

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