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Value Creation and Firm Integration: First Empirical Evidence for the Software Industry

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  • Pussep, Anton
  • Harnisch, Stefan
  • Buxmann, Peter

Abstract

The value added created by a firm is a widely used figure. Major elements of a firm’s strategy and business model deal with how the firm creates value and brings it to the customer. This paper focuses on a particular measure which has been broadly applied to measure the degree of vertical integration: value added to sales (VA/S). To our best knowledge, this measure hasn’t been applied in software business research. We hence outline its application in other fields by conducting a broad and structured literature review. First empirical insights are gained by analyzing the VA/S development for 44,171 software firms in the period 2002-2009. These results indicate an increasing degree of vertical integration in the software industry. While practitioners can use the results as a benchmark for their own firms, researchers are provided with a comprehensive literature review, first empirical results on a large sample and avenues for research.

Suggested Citation

  • Pussep, Anton & Harnisch, Stefan & Buxmann, Peter, 2012. "Value Creation and Firm Integration: First Empirical Evidence for the Software Industry," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 57629, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    • Handle: RePEc:dar:wpaper:57629
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/57629/
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    File URL: http://link.springer.com/chapter/10.1007/978-3-642-30746-1_19
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    Keywords

    software industry; vertical integration; value added to sales; degree of vertical integration;
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