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Estimating complementarity among vertical restraints: Evidence from manufacturing firms

Author

Listed:
  • Xulia González

    (University of Vigo)

  • Daniel Miles

    (Universidad de Vigo)

Abstract

This paper uses a bivariate probit model to analyze firms' decisions to impose regimes of exclusive dealing and/or exclusive territories with their distributors. We employ a panel data set of manufacturing firms (from 1990 to 2005) that contains information about such vertical restraints. Firms report whether they impose vertical restraints on their distributors (retailers or wholesalers) and the type: resale price maintenance, full line forcing, exclusive dealing, and/or exclusive territories. Our results show that the likelihood of imposing exclusive dealing and/or exclusive territories varies widely by industry and that small size greatly reduces the likelihood of imposing exclusive dealing (but not exclusive territories). The results also show the existence of complementarities between exclusive territories and exclusive dealing but not with other types of restraint.

Suggested Citation

  • Xulia González & Daniel Miles, 2011. "Estimating complementarity among vertical restraints: Evidence from manufacturing firms," Economics Bulletin, AccessEcon, vol. 31(4), pages 3331-3338.
    • Handle: RePEc:ebl:ecbull:eb-11-00134
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    More about this item

    Keywords

    vertical restraints; exclusive dealing; exclusive territories; manufacturing industry;
    All these keywords.

    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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