IDEAS home Printed from https://ideas.repec.org/a/inm/ororsc/v3y1992i1p138-156.html
   My bibliography  Save this article

Vertical Strategies and Market Structure: A Systematic Risk Analysis

Author

Listed:
  • Sayan Chatterjee

    (The Weatherhead School of Management, Department of Marketing and Policy, Case Western Reserve University, Cleveland, Ohio 44106)

  • Michael Lubatkin

    (368 Fairfield Road/Box U-41B, University of Connecticut, Storrs, Connecticut 06269-2041 and Groupe ESC Lyon, Lyon, France)

  • Timothy Schoenecker

    (Krannert Graduate School of Management, Purdue University, West Lafayette, Indiana 47907)

Abstract

This study examines the implications of vertical mergers on the risk characteristic of the merging firms. Specifically, the study focuses on three structural characteristics of the acquiring and acquired firm's market to explain the change in the systematic or environmental risk of the acquiring firm. These structural factors are the level of competition in the acquiring firm's industry, the level of competition in the acquired firm's industry, and the growth rate of the acquiring firm's industry. The findings suggest that vertical mergers are effective at reducing systematic risk particularly when the acquiring firm competes in a concentrated market. Further, this result appears to be stable across life cycle stages.

Suggested Citation

  • Sayan Chatterjee & Michael Lubatkin & Timothy Schoenecker, 1992. "Vertical Strategies and Market Structure: A Systematic Risk Analysis," Organization Science, INFORMS, vol. 3(1), pages 138-156, February.
    • Handle: RePEc:inm:ororsc:v:3:y:1992:i:1:p:138-156
    DOI: 10.1287/orsc.3.1.138
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/orsc.3.1.138
    Download Restriction: no
    File URL: https://libkey.io/10.1287/orsc.3.1.138?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dzhagityan, Eduard, 2012. "The effect of ex post risks on post-M&A performance efficiency," MPRA Paper 63147, University Library of Munich, Germany.
    2. Micola, Augusto Rupérez & Banal-Estañol, Albert & Bunn, Derek W., 2008. "Incentives and coordination in vertically related energy markets," Journal of Economic Behavior & Organization, Elsevier, vol. 67(2), pages 381-393, August.
    3. Joshua D. Shackman, 2007. "Corporate diversification, vertical integration, and internal capital markets: A cross-country study," Management International Review, Springer, vol. 47(4), pages 479-504, October.
    4. Gautam Ray & Dazhong Wu & Prabhudev Konana, 2009. "Competitive Environment and the Relationship Between IT and Vertical Integration," Information Systems Research, INFORMS, vol. 20(4), pages 585-603, December.
    5. Lajili, Kaouthar & Mahoney, Joseph T., 2005. "Revisiting Agency and Transaction Costs Theory Predictions on Vertical Financial Ownership and Contracting: Electronic Integration as an Organizational Form Choice," Working Papers 05-0106, University of Illinois at Urbana-Champaign, College of Business.
    6. Kaouthar Lajili & Joseph T. Mahoney, 2006. "Revisiting agency and transaction costs theory predictions on vertical financial ownership and contracting: electronic integration as an organizational form choice," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(7), pages 573-586.
    7. Chipalkatti Niranjan & Buchanan Bonnie G. & Koch Bruce & Doh Jonathan, 2013. "Enhancing Value in IT Services Offshoring: Real Options Matter," Asia-Pacific Journal of Risk and Insurance, De Gruyter, vol. 8(1), pages 123-147, December.
    8. Schön, Benjamin & Pyka, Andreas, 2013. "The success factors of technology-sourcing through mergers & acquisitions: An intuitive meta-analysis," FZID Discussion Papers 78-2013, University of Hohenheim, Center for Research on Innovation and Services (FZID).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ororsc:v:3:y:1992:i:1:p:138-156. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.