Asia Pacific Journal of Management

, Volume 31, Issue 2, pp 377–396

Micro-determinants of vertical integration: Evidence from China

Article

DOI: 10.1007/s10490-012-9338-0

Cite this article as:
Huang, D. & Liu, L. Asia Pac J Manag (2014) 31: 377. doi:10.1007/s10490-012-9338-0
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Abstract

The state-of-the-art literatures, industrial economics, transaction cost theory, and real options theory explain vertical integration (VI) from the perspective of industrial characteristics. However, even within the same industry, VI greatly differs from firm to firm. This indicates that there may be firm-level (micro) determinants in VI. In an effort to probe into firm-level (micro) determinants of VI, we analyze data on the publicly listed firms of the electronics industry in China from 1998 to 2008. We find that between the two micro determinants, firm-oriented determinants consist of three groups of factors of value—profitability, growth, and risk—but insider-oriented determinants do not significantly impact VI.

Keywords

Vertical integration Firm-oriented determinant Insider-oriented determinant Empirical study Electronics industry 

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Antai College of Economics and Management, Department of MarketingShanghai Jiao Tong UniversityShanghaiChina