Affiliation, Integration, and Information: Ownership Incentives and Industry Structure / Thomas N. Hubbard.

Format:

Book

Author/Creator:

Hubbard, Thomas N.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8300.

NBER working paper series no. w8300

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Affiliation, Integration, and Information

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2001.

Summary:

This paper presents theory and evidence on horizontal industry structure, focusing on situations where plant-level scale economies are small and market power is not an issue. At issue is the question: what makes industries necessarily fragmented? The theoretical model distinguishes between the structure of brands and firms in an industry by examining trade-offs associated with affiliation and integration, and how they are affected by the contracting environment. I show how contractual incompleteness can lead industries to be necessarily fragmented. I also show that improvements in the contracting environment will tend to lead to a greater concentration of brands, but whether they lead industries to be more or less concentrated depends on what becomes contractible. I then discuss the propositions generated by the model through a series of case study examples.

Notes:

Print version record

May 2001.