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Vertical Integration and Performance in the United States Computer Hardware Industry
- Article from:
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International Journal of Management
- Article date:
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June 1, 2004
- Author:
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;
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Copyright informationCopyright International Journal of Management Jun 2004. Provided by ProQuest LLC. (Hide copyright information)
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This study examines the relationship between firm performance and the vertical integration strategies of 50 U.S. computer hardware manufacturers. We propose that between-stage and within-stage vertical integration have differential effects on performance. Our findings indicate that in the computer hardware industry within-stage vertical integration is negatively related to performance. Between-stage integration is not associated with performance. These results suggest that the core extension benefits of within-stage integration may be outweighed by the costs to manage a wide breadth of activities in more than one value-added chain. The implications for future research are discussed.
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