6533b86ffe1ef96bd12cd3f0
RESEARCH PRODUCT
Vertical integration and profitability of the agrifood industry in an economic crisis context
Alfredo Juan Grau GrauAraceli Reigsubject
Transaction costmedia_common.quotation_subjectspecificity of assetslcsh:SContext (language use)Crisi financera global 2007-2009Economiareturn on assetsVertical integrationtransaction costslcsh:AgricultureFinancial crisisProfitability indexBusinessProduct (category theory)Asset (economics)integration strategyintegration strategy return on assets transaction costs specificity of assetsAgronomy and Crop ScienceAgricultural EconomicsIndustrial organizationReputationmedia_commondescription
<p>In a setting of economic and financial crisis, most companies experienced a reduction in their profitability. Thus, our study allows us to identify vertical integration strategies developed by companies to overcome the crisis. This paper is aimed at unveiling the determining factors of the profitability of Spanish agrifood firms, depending on whether they are backwards vertically integrated or not. In order to attain our objective, we implemented a first difference regression model. The main contributions of the article lie in the incorporation of a variable that distinguishes integrated firms from the rest and the separate analysis of the two groups of firms. The results suggest that firms that seek to differentiate themselves, either through offering a specific product or through providing higher quality with a view to maintaining their reputation, are more likely to adopt vertical integration due to the higher transaction costs of relations with suppliers. The grouping carried out in this study is shown to be highly relevant as asset structure implies different strategies for actions aimed at increasing profitability.</p>
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2015-12-02 | Spanish Journal of Agricultural Research |