Digging deep to compete: vertical integration, product market competition and prices
This article establishes a causal effect of product market competition on vertical integration. I exploit a hitherto unexplored natural experiment in the US coal mining industry and a unique mine-level organizational data set. Following an exogenous increase in product market competition the inciden...
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| Format: | Article |
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Wiley
2017
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| Online Access: | https://eprints.nottingham.ac.uk/47206/ |
| _version_ | 1848797489625300992 |
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| author | McGowan, Danny |
| author_facet | McGowan, Danny |
| author_sort | McGowan, Danny |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | This article establishes a causal effect of product market competition on vertical integration. I exploit a hitherto unexplored natural experiment in the US coal mining industry and a unique mine-level organizational data set. Following an exogenous increase in product market competition the incidence of vertical integration fell by 33% within the treatment group relative to the counterfactual. I find novel evidence that transition to the lower degree of vertical integration is driven by competition reducing market prices by 32% which decreased the incentive to conduct vertical mergers. I discuss several possible interpretations of these changes. |
| first_indexed | 2025-11-14T20:04:42Z |
| format | Article |
| id | nottingham-47206 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T20:04:42Z |
| publishDate | 2017 |
| publisher | Wiley |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-472062020-05-04T19:23:03Z https://eprints.nottingham.ac.uk/47206/ Digging deep to compete: vertical integration, product market competition and prices McGowan, Danny This article establishes a causal effect of product market competition on vertical integration. I exploit a hitherto unexplored natural experiment in the US coal mining industry and a unique mine-level organizational data set. Following an exogenous increase in product market competition the incidence of vertical integration fell by 33% within the treatment group relative to the counterfactual. I find novel evidence that transition to the lower degree of vertical integration is driven by competition reducing market prices by 32% which decreased the incentive to conduct vertical mergers. I discuss several possible interpretations of these changes. Wiley 2017-12-18 Article PeerReviewed McGowan, Danny (2017) Digging deep to compete: vertical integration, product market competition and prices. Journal of Industrial Economics, 65 (4). pp. 683-718. ISSN 1467-6451 http://onlinelibrary.wiley.com/doi/10.1111/joie.12157/full doi:10.1111/joie.12157 doi:10.1111/joie.12157 |
| spellingShingle | McGowan, Danny Digging deep to compete: vertical integration, product market competition and prices |
| title | Digging deep to compete: vertical integration, product market competition and prices |
| title_full | Digging deep to compete: vertical integration, product market competition and prices |
| title_fullStr | Digging deep to compete: vertical integration, product market competition and prices |
| title_full_unstemmed | Digging deep to compete: vertical integration, product market competition and prices |
| title_short | Digging deep to compete: vertical integration, product market competition and prices |
| title_sort | digging deep to compete: vertical integration, product market competition and prices |
| url | https://eprints.nottingham.ac.uk/47206/ https://eprints.nottingham.ac.uk/47206/ https://eprints.nottingham.ac.uk/47206/ |