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Explaining Vertical Integration: Lessons from the American Automobile Industry

Published online by Cambridge University Press:  03 March 2009

Richard N. Langlois
Affiliation:
Associate Professor of Economics, University of Connecticut, Storrs, CT 06269-1063.
Paul L. Robertson
Affiliation:
Associate Professor of Economics, University of Connecticut, Storrs, CT 06269-1063.

Extract

The early history of the American automobile industry provides fertile hunting grounds for theorists seeking corroboration of various, conflicting theories of vertical integration. An examination of the whole history suggests that no single theory always fits the facts perfectly. A complete explanation must combine specific theories in a way that is attentive to such factors as industry life-cycle, demand, economies of scale, and appropriability. If there is any “general” theory, it lies in the set of “dynamic” transaction-cost approaches rather than in the asset-specificity approach now dominant.

Type
Articles
Copyright
Copyright © The Economic History Association 1989

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References

The authors would like to thank Lee Alston, Fred Carstensen, Daniel Raff, John D. Robertson, and John R. Robertson for helpful comments.Google Scholar

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