The expansion and development of a private business: an application of vertical integration theory.

The neo-classical view of the firm held that its growth beyond a certain scale was improbably as a result of the assumption of declining returns built into the theory of monopolistic competition.[1] In recent years institutional economists have rejected this historically inaccurate view of the firm and offered explanations of the growth of the modern large scale corporation and its role in providing a competitive structure for the economy. Their research has focused upon vertical integration as the predominant form of growth for the modern corporation.[2] A wide range of more general or specific explanations of vertical integration have been offered. Although some of them are ...

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