Endogeneous outsourcing and vertical integration with process R&D

Rossini, Gianpaolo ; Lambertini, Luca (2003) Endogeneous outsourcing and vertical integration with process R&D. Bologna: Dipartimento di Scienze economiche DSE, p. 18. DOI 10.6092/unibo/amsacta/4807. In: Quaderni - Working Paper DSE (487). ISSN 2282-6483.
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Abstract

According to received literature, vertical integration may enjoy a social superiority due to the ability to internalize the externality that goes back from the pricing policy of the downstream firm to the profits of the upstream firm. We challenge this result introducing process R&D in a broad set of scenarios with vertically symmetric and asymmetric R&D commitments. In some of these contexts a reversed sequence of socially desirable vertical arrangements arises, making outsourcing superior. In other circumstances disintegration is privately superior but socially inefficient. Finally, vertically asymmetric costs of R&D are considered to allow for a wider range of applications.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Rossini, Gianpaolo
Lambertini, Luca
Keywords
Vertical Integration, Process R&D
Subjects
ISSN
2282-6483
DOI
Deposit date
09 Mar 2016 14:59
Last modified
09 Mar 2016 14:59
URI

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