Vertical Integration and Input Flows垂直整合与投入流.pdfVIP

American Economic Review 2014, 104(4): 1120–1148 /10.1257/aer.104.4.1120 Vertical Integration and Input Flows† By Enghin Atalay, Ali Hortaçsu, and Chad Syverson* We use broad-based yet detailed data from the economy’s goods- producing sectors to investigate firms’ ownership of production chains. It does not appear that vertical ownership is primarily used to facilitate transfers of goods along the production chain, as is often presumed: roughly one-half of upstream establishments report no shipments to downstream establishments within the same firm. We propose an alternative explanation for vertical ownership , namely that it promotes efficient intrafirm transfers of intangible inputs. We show evidence consistent with this hypothesis, including the fact that, after a change of ownership, an acquired establishment begins to resemble the acquiring firm along multiple dimensions. (JEL G32, G34, L14, L22, L60, M11) Many firms own links of production chains. That is, they operate both upstream and downstream establishments, where the upstream industry produces an input used by the downstream industry. We explore the reasons for such ownership using two detailed and comprehensive datasets on ownership structure, production, and shipment patterns throughout broad swaths of the US economy. We find that most vertical ownership does not appear to be primarily concerned with facilitating physical goods movements along a production chain within the firm, as is commonly presumed. Upstream units ship surprisingly small shares of