scholarly journals PRODUCT DIFFERENTIATION STRATEGY AND VERTICAL INTEGRATION: AN APPLICATION TO THE DOC RIOJA WINE INDUSTRY

2016 ◽  
Vol 17 (5) ◽  
pp. 796-809
Author(s):  
Marta FERNÁNDEZ-OLMOS ◽  
Natalia DEJO-ORICAIN ◽  
Jorge ROSELL-MARTÍNEZ
Keyword(s):  
Transaction Costs ◽  
Product Differentiation ◽  
Vertical Integration ◽  
Representative Sample ◽  
Wine Industry ◽  
Firm Level ◽  
Differentiation Strategy ◽  
Proposed Model ◽  
Unforeseen Contingencies

This study evaluates the importance of product differentiation as a determinant of vertical integration in firms. The proposed model also controls for known determinants of integration, such as transaction costs and firm-level capabilities. By identifying transaction-, firm- and strategy-level determinants, we derive testable predictions about the vertical integration decision. To test these predictions we analyze the Rioja wine industry, using a representative sample of 187 firms. Our paper concludes that reaching judicious vertical integration decisions requires a thorough analysis of some very diverse aspects, especially those related to mitigating opportunism, dealing with unforeseen contingencies and product differentiation.

Vertical integration in the wine industry: a transaction costs analysis on the Rioja DOCa

Agribusiness ◽  
2009 ◽  
Vol 25 (2) ◽  
pp. 231-250 ◽  
Author(s):  
Marta Fernández-Olmos ◽  
Jorge Rosell-Martínez ◽  
Manuel A. Espitia-Escuer
Keyword(s):  
Transaction Costs ◽  
Vertical Integration ◽  
Wine Industry ◽  
Costs Analysis

Empirical Analysis

2020 ◽  
pp. 195-199
Author(s):  
Murali Patibandla
Keyword(s):  
Panel Data ◽  
Transaction Costs ◽  
Vertical Integration ◽  
Transnational Corporations ◽  
Time Dimension ◽  
Firm Level ◽  
Reform Era ◽  
Long Time ◽  
High Degree ◽  
Trade And Investment

Econometric exercises were based on firm level panel data which covers a long-time dimension of the Post-reform era. Three industries were chosen Automobiles (AM), Auto-components (AC), and Two-wheelers (TW). These industries were chosen because of their high degree of exposure to Transnational corporations (TNCs). The results demonstrate that exports are explained positively by TE, firm size, and labour intensity, which implies that firms have become very competitive in the Post-reforms era and large firms started to play important role in exports. TE variable is explained positively by R&D, Imports, Technology purchases and vertical integration. This implies firms augmented their technological efforts in the Post-reform’s era. The result for Vertical integration variable implies India remains a high transaction costs economy. The estimated augmented production function in general shows exposure to international trade and investment results positive benefits to the Indian economy.

Transactional dynamics in European R & D networks: an assessment of Eureka

2015 ◽  
Vol 18 (3) ◽  
pp. 330-354
Author(s):  
Bruno Brandão Fischer ◽  
José Molero
Keyword(s):  
Transaction Costs ◽  
Transaction Cost Economics ◽  
Empirical Support ◽  
Research Area ◽  
Dynamic Interactions ◽  
Firm Level ◽  
Content Type ◽  
Dynamic Framework ◽  
Level Data ◽  
Ex Ante

Purpose – The purpose of this paper is to verify the impacts of the transaction costs rationale on economic agents’ innovative results when they engage in European R & D networks, supplying both firms and policymakers with empirical support for improved decision making toward economic competitiveness and construction of the European research area. Furthermore, unlike many transaction cost economics assessments, the authors evaluate the existence of transaction costs following a dynamic framework of analysis (instead of using solely ex ante governance choice as a driver of inter-firm “friction” management), offering a novel perspective on these phenomena. Design/methodology/approach – Data consist of firm-level information from Eureka’s Final Reports (1995-2006) for Spanish, Italian, French, British and German firms. Empirical assessments were performed through a two-step approach of direct and indirect effects of network management and potential sources of disturbances. Ordinal regressions were applied in order to identify transaction costs’ relevance as drivers of firms’ technological and commercial outcomes, as well as on managerial quality of alliances. Statistical controls include microeconomic and project-specific variables. Findings – Results highlight the role played by transactional aspects as drivers of companies’ outcomes and managerial complexity. Furthermore, the authors find robust evidence that formal ex ante governance structures are incapable of satisfactorily addressing dynamic disturbances that take place within R & D networks. Whereas such findings are directly related to existing transaction costs, the authors find no support for the usual variables attributed to increased complexity in international inter-firm relationships. Research limitations/implications – Self-selection issues are inherently related to the research instrument (i.e. Eureka’s Reports), while further firm-level data could not be obtained since confidentiality issues protected companies’ names and sectors. Also, network-level data are not available, allowing the evaluation of individual perceptions only. Originality/value – While literature addresses the issue of transaction costs in R & D networks via theoretical assumptions and rough proxies, this assessment offers an in-depth evaluation of a set of valuable indicators with direct implications for researchers, managers and policymakers. Main contributions concern the identification of dynamic interactions (and their respective disturbances) as a key feature of the overall performance of R & D networks, stressing the non-linearity of economic processes in these hybrid relationships, an issue that has been poorly tackled by previous empirical investigations.

Agricultural Co-operatives

2017 ◽  
Author(s):  
Samira Nuhanovic-Ribic ◽  
Ermanno C. Tortia ◽  
Vladislav Valentinov
Keyword(s):  
Developing Countries ◽  
Transaction Costs ◽  
Vertical Integration ◽  
Large Scale ◽  
Scale Production ◽  
Economic Literature ◽  
Economic Independence ◽  
Large Scale Production ◽  
Entrepreneurial Action

Over the last decades, agricultural co-operatives grew substantially in most developed and developing countries, often reaching dominant market positions. We inquire into the economic mechanism behind this growth, by elaborating on the relation between co-operative identity and co-operative benefits. We highlight the ability of agricultural co-operatives to co-ordinate large-scale production, to monitor work contributions and product quality, and to ensure economic independence of farmer members. Following the two principal streams in the economic literature, we distinguish between the conceptions of agricultural co-operatives as units of vertical integration and as firms characterized by common governance of collective entrepreneurial action and ability to reduce transaction costs and economic risk. We describe the financial and governance limitations of agricultural co-operatives while taking account of new co-operative models presenting institutional tools introduced to overcome these limitations. We conclude by suggesting directions for enhancing the role of co-operatives in agricultural and rural development.

Do generous trade credit terms provide a competitive edge?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dmytro Osiichuk ◽  
Paweł Wnuczak
Keyword(s):  
Product Differentiation ◽  
Trade Credit ◽  
Negative Relationship ◽  
Growth Enhancement ◽  
Firm Level ◽  
Supplier Relationships ◽  
Content Type ◽  
Segmented Markets ◽  
Industry Competition ◽  
Dynamic Panel Regression

PurposeThe authors document a persistent negative link between contemporaneous trade credit provision and subsequent firm-level operating performance.Design/methodology/approachTextual analysis of firms' profile descriptions is used to study the role of market segmentation and product differentiation in intermediating the nexus between trade credit and corporate performance. The paper relies on dynamic panel regression modeling to investigate the postulated empirical relationships. This approach allows to address endogeneity issues and to test a number of different model specifications.FindingsDespite fueling short-term sales growth, the more generous trade credit terms are found to be associated with lower post hoc margins and declining overall business profitability. The market share is not affected by firms' proclivity to provide trade credit suggesting that the latter may not be effectively used as a long-term growth enhancement strategy. Firms' similarity to their competitors is found to play a salient role in altering the magnitude of the discovered negative relationship.Originality/valueThe authors find that the intensity of intra-industry competition measured by firms' similarity to their competitors magnifies the discovered negative trade credit-performance nexus. Therefore, generous trade credit may play a more important role in solidifying client–supplier relationships on the more segmented markets with a higher degree of product differentiation.

THE IMPACT OF MARKETING’S INNOVATION-RELATED CAPABILITIES ON A FIRM’S INNOVATION PERFORMANCE

2019 ◽  
Vol 24 (06) ◽  
pp. 2050054
Author(s):  
OSMAN GÖK ◽  
SINEM PEKER
Keyword(s):  
Innovation Process ◽  
Innovation Performance ◽  
Marketing Capabilities ◽  
Mediation Model ◽  
Firm Level ◽  
Innovation Development ◽  
Marketing Department ◽  
Moderated Mediation Model ◽  
Proposed Model ◽  
The Impact

Innovation performance is a potential source of competitive advantage for any firm. A capable marketing department (MD) can contribute significantly to the market success of the new products and services offered. Therefore, understanding the impact of marketing’s innovation-related capabilities in the innovation process is an important area of inquiry to achieve a more innovative and competitive company. This study examines the relations among relevant MD capabilities, marketing’s decision influence on innovation development and a firm’s innovation performance. The results indicate that the capabilities of the MD are strongly associated with the firm’s innovation performance. Our findings also demonstrate that marketing capabilities have a positive relationship with the department’s influence on innovation development. However, the department’s influence on innovation decisions has no effect on the firm’s innovation performance. We proposed a moderated mediation model considering a set of firm-level and environmental contingency variables. Results reveal that the proposed model relationships are indifferent for all the sub-groups of moderators.

scholarly journals A Taxonomy of Eco-Innovation Types in SMEs: Exploring Different Firm Profiles in the Canadian Wine Industry

2019 ◽  
Vol 11 (20) ◽  
pp. 5776 ◽  
Author(s):  
David Doloreux ◽  
Luisa Kraft
Keyword(s):  
Wine Industry ◽  
Firm Characteristics ◽  
Firm Level ◽  
Fully Integrated ◽  
Level Data ◽  
Firm Level Data ◽  
Innovation Strategies ◽  
Process Oriented

The paper examines eco-innovation strategies in the Canadian wine industry. It uses firm-level data of 151 wine firms that developed eco-innovations between 2015 and 2017 to build a taxonomy of four eco-innovation strategies: (i) eco-innovation laggers, (ii) product-oriented eco-innovators, (iii) process-oriented eco-innovators, and (iv) fully integrated eco-innovators. We then characterize these eco-innovation strategies with respect to firm-level innovation capabilities, firms’ knowledge openness, and firms’ specific characteristics. The results reveal heterogeneity in eco-innovation strategies and show that these strategies exhibit different configurations of innovation-related conditions and firm characteristics.

scholarly journals Two-Stage Fuzzy Portfolio Selection Problem with Transaction Costs

2015 ◽  
Vol 2015 ◽  
pp. 1-12 ◽  
Author(s):  
Yanju Chen ◽  
Ye Wang
Keyword(s):  
Transaction Costs ◽  
Portfolio Selection ◽  
Optimal Solution ◽  
Single Stage ◽  
Selection Problem ◽  
Stage Model ◽  
Two Stage ◽  
Portfolio Selection Problem ◽  
Fuzzy Portfolio Selection ◽  
Proposed Model

This paper studies a two-period portfolio selection problem. The problem is formulated as a two-stage fuzzy portfolio selection model with transaction costs, in which the future returns of risky security are characterized by possibility distributions. The objective of the proposed model is to achieve the maximum utility in terms of the expected value and variance of the final wealth. Given the first-stage decision vector and a realization of fuzzy return, the optimal value expression of the second-stage programming problem is derived. As a result, the proposed two-stage model is equivalent to a single-stage model, and the analytical optimal solution of the two-stage model is obtained, which helps us to discuss the properties of the optimal solution. Finally, some numerical experiments are performed to demonstrate the new modeling idea and the effectiveness. The computational results provided by the proposed model show that the more risk-averse investor will invest more wealth in the risk-free security. They also show that the optimal invested amount in risky security increases as the risk-free return decreases and the optimal utility increases as the risk-free return increases, whereas the optimal utility increases as the transaction costs decrease. In most instances the utilities provided by the proposed two-stage model are larger than those provided by the single-stage model.

Liability of Middleness Revisited: The Advantages for Mid-Sized Competitors in Renewable Natural Resource Industries

2019 ◽  
Vol 15 (4) ◽  
pp. 737-772 ◽  
Author(s):  
Alfonso Cruz ◽  
Tomas Reyes ◽  
Roberto Vassolo
Keyword(s):  
Product Differentiation ◽  
Natural Resource ◽  
Product Line ◽  
Capital Investments ◽  
Market Selection ◽  
Firm Level ◽  
Line Scale ◽  
The Us ◽  
Renewable Natural Resource ◽  
Curvilinear Effect

ABSTRACTSize is an important antecedent of firm survival, and several studies theoretically sustain and empirically support a ‘liability of middleness’. Indeed, it is widely believed that companies should act strategically to either become large or remain small and occupy a niche position, because mid-sized firms face the strongest market selection pressures. This study challenges that logic in renewable natural resource industries. Measuring size as product-line scale and firm-level portfolio breadth, we argue that in industries characterized by cost competition, the lack of product differentiation, large capital investments, and sharp price oscillation, scale and breadth have a curvilinear effect on survival that favors mid-sized firms rather than penalizing them. An empirical analysis of the US pulp and paper (P&P) industry over the period 1970–2000 strongly supports our arguments. This study is particularly relevant for emerging economies, in which natural resource industries represent an important portion of the total economic activity.

Sign in / Sign up

Export Citation Format

Share Document