Share:


Product differentiation strategy and vertical integration: an application to the DOC Rioja wine industry

    Marta Fernández-Olmos Affiliation
    ; Natalia Dejo-Oricain Affiliation
    ; Jorge Rosell-Martínez Affiliation

Abstract

This study evaluates the importance of product differentiation as a determinant of vertical integration in firms. The proposed model also controls for known determinants of integration, such as transaction costs and firm-level capabilities. By identifying transaction-, firm- and strategy-level determinants, we derive testable predictions about the vertical integration decision. To test these predictions we analyze the Rioja wine industry, using a representative sample of 187 firms. Our paper concludes that reaching judicious vertical integration decisions requires a thorough analysis of some very diverse aspects, especially those related to mitigating opportunism, dealing with unforeseen contingencies and product differentiation.

Keyword : transaction cost economics, resource based view, product differentiation, vertical integration, wine industry, opportunism

How to Cite
Fernández-Olmos, M., Dejo-Oricain, N., & Rosell-Martínez, J. (2016). Product differentiation strategy and vertical integration: an application to the DOC Rioja wine industry. Journal of Business Economics and Management, 17(5), 796-809. https://doi.org/10.3846/16111699.2013.815130
Published in Issue
Oct 27, 2016
Abstract Views
83
PDF Downloads
197