TY  - JOUR
AU  - Hubbard,Thomas N.
TI  - Affiliation, Integration, and Information: Ownership Incentives and Industry Structure
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8300
PY  - 2001
Y2  - May 2001
UR  - http://www.nber.org/papers/w8300
L1  - http://www.nber.org/papers/w8300.pdf
N1  - Author contact info:
Thomas Hubbard
615 Leverone Hall
Kellogg School of Management
Northwestern University
Evanston, IL  60208
Tel: 773/834-4074
Fax: 773/702-0458
E-Mail: t-hubbard@kellogg.northwestern.edu
AB  - This paper presents theory and evidence on horizontal industry structure, focusing on situations where plant-level scale economies are small and market power is not an issue.  At issue is the question: what makes industries necessarily fragmented? The theoretical model distinguishes between the structure of brands and firms in an industry by examining trade-offs associated with affiliation and integration, and how they are affected by the contracting environment.  I show how contractual incompleteness can lead industries to be necessarily fragmented. I also show that improvements in the contracting environment will tend to lead to a greater concentration of brands, but whether they lead industries to be more or less concentrated depends on what becomes contractible.  I then discuss the propositions generated by the model through a series of case study examples.
ER  -