Specifically, the study used six factors; namely, cost of divestment relative to the firm's asset base, operating fit, marketing fit, degree of forward vertical integration, degree of backward vertical integration, and number of years the unit has been with the firm.
For backward vertical integration, "high" means a unit whose sales contribute to a large fraction of the total purchases of the unit or units downstream.
BACKWARD-VI = Backward vertical integration of the unit (degree to which it sells to other units of the firm).
No significant difference was found between the mean relative weights of backward vertical integration and cost of divestment, or between operating fit and marketing fit.
Forward vertical integration is found to [TABULAR DATA FOR TABLE 5 OMITTED] raise a greater barrier than backward vertical integration in a declining industry.
As Harrigan (1985b) pointed out, however, the phase of the product life cycle is important, and can change the relative importance of forward and backward vertical integration.