Upstream R&D-The Comparison of Economic Efficiency between Vertical Integration and Horizontal Integration

• Main Authors: CHAO,YU-MIN, 趙育敏
• Other Authors: HSIEH, TENG-LUNG
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/5w2y5d

碩士 === 東海大學 === 國際經營與貿易學系 === 104 === This study applied the modified Cournot model proposed by Buehler & Schmutzler (2008) and Milliou & Pavlou (2013) to analyze and compare the economic efficiency of vertical and horizontal integration. For the industry of upstream R&D, this model examines the effect of market size, product substitutability and the nature of R&D on the economy output.The results suggest that upstream firms will benefit from either vertical or horizontal integration, and the benefits will be greater when the product substitutability is lower. While the market size becomes bigger, the benefit is further enhanced as a consequence. To compare the efficiency between vertical and horizontal integration, the vertical integration firm will gain more economic efficiency if they have stronger R&D specification and higher product substitutability. On the other hand, the horizontal integration firm will gain more economic efficiency if they have less R&D specification and lower product substitutability.