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Empirical Regularities in the Vertical Restraints of Manuacturing Firms

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  • Xulia González

Abstract

This paper exploits a unique panel data set of Spanish manufacturing firms that contains information on vertical restraints affecting retailers and wholesalers. First, we analyze the scope of vertical restraints by identifying industry and size heterogeneities. Second, we explore the determinants of resale price maintenance by focusing on the effect of an upstream firm’s effort to increase demand. After presenting a simple theoretical framework, we use a linear probability model to analyze the empirical determinants of a manufacturing firm’s control of the resale price. We find that firms that make a greater advertising effort impose a resale price more frequently, as do larger firms and those that impose other restraints such as exclusive territories. Copyright International Atlantic Economic Society 2015

Suggested Citation

  • Xulia González, 2015. "Empirical Regularities in the Vertical Restraints of Manuacturing Firms," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(2), pages 181-194, June.
    • Handle: RePEc:kap:atlecj:v:43:y:2015:i:2:p:181-194
    DOI: 10.1007/s11293-015-9452-8
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    References listed on IDEAS

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    1. Thomas W. Gilligan, 1986. "The Competitive Effects of Resale Price Maintenance," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 544-556, Winter.
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    More about this item

    Keywords

    Vertical restraints; Resale price maintenance; Manufacturing sector; L22; L12;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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