Economies of vertical integration

Economies of vertical integration

Produced by achieving lower operating costs by owning all components of production and sometimes sales outlets rather than contracting with companies in the outside marketplace.
References in periodicals archive ?
Probably the best known sources of static efficiencies are "economies of scale," "economies of scope," and "economies of vertical integration."
Economies of vertical integration can be tested using the TMCF by examining whether or not the cost function exhibits economies of scope.
Evolving economic analysis gave substantial theoretical and empirical support for the existence and importance of real economies of vertical integration. Increasingly, vertical integration and mergers were seen as ways to realize efficiencies or avoid inefficiencies by reducing the cost of conducting transactions, improving information flows, and allowing better coordination in the use of complementary assets.