Up- and down- alliances: A systematic literature review

This paper develops a systematic literature review about up- and down- alliances: vertical alliances (VAs) characterized by long term continuity between firms operating in adjacent stages of a value chain. Vertical alliances are a must for firms operating in a complex and unstable world, because they guarantee the advantages deriving from the vertical coordination of the value chain as well as the flexibility of cooperation.In spite of the copious literature on alliances, few contributions focus specifically on VAs, so a clear overview of the phenomenon is missing. Furthermore, the different terminology and definitions found in the literature are confusing. Our systematic literature review identifies the theoretical approaches which are most used to study the development, potential and dynamics of VAs. The review highlights the main theories and the most explored topics, and identifies the gaps still existing in the literature. From the review, we developed a taxonomy to determine which research stream would be most congruent to a specific research topic.     

Does distance matter in foreign direct investment sub-national location choice? Evidence from China

Multinational enterprises (MNEs) make investment decisions according to the distance factors at a sub-national level. This paper made estimates using the gravity model with provincial foreign direct investment (FDI) data from 2000 to 2012 and employed three concepts of distance. Our empirical results indicate that geographic distance and cultural distance have significant negative effects on FDI flow, whereas economic distance has a significant positive effect. It suggests that FDI prefers to locate in regions that are geographically and culturally close but economically distant from the home country, which further implies that FDI in China is dominated by vertical FDI. Our findings suggest that Chinese provincial governments should place emphasis on attracting FDI from culturally close countries and provide institutional support to encourage and promote horizontal FDI.     

Violation behavior in vertical restraint: Empirical analyses in the case of retail price maintenance

An extensive body of work within the marketing and economics literature has been devoted to studying vertical restraints, yet only a few researchers have investigated the violation behavior of retailers. In this paper, we investigate violation behavior in the context of retailer price maintenance. We investigate this behavior using a unique data set from a subsidy program in China, which includes transaction-level information that shows retail price maintenance (RPM) practices in multiple product categories by multiple manufacturers across multiple markets. The results from our fixed effects regression show that retailer violations are more likely to occur when intra-product competition is high. However, how retailer violation likelihood varies with inter-product competition may depend on the product category. We find that inter-product competition, is negatively associated with the likelihood of violation, for “less popular” product categories in the program such as washing machines, air conditioners, etc., but is positively associated with the likelihood of violation for “popular” product categories such as refrigerators, televisions, and cell phones. Our research provides some of the first empirical evidence about retailer violation behavior under RPM in the world’s largest emerging market by focusing on the relationship between violation behavior and market structure. We discuss the implications for monitoring efforts of manufacturers and regulators.     

农业减量化：农户经营的规模逻辑及其证据

本文将农户分为五种类型,并将农地规模分解为地块规模、经营规模与连片规模,由此构建“农户类型—规模形式—减量化行为”的分析框架,进而阐明农户减量化的规模逻辑。基于农户问卷的实证分析表明:①对于所有样本农户来说,地块规模越大,减施量越高。其中,追求产量最大化的生产型小农,减施量与经营规模呈“倒U”型变化,而追求多元化经营的功能型小农,减施量随经营规模的扩大而增加;②农户连片规模扩大,减施量就增高,并且能够增强地块规模扩大以及经营规模扩大对减施的促进作用;③农户社会服务卷入程度加深,能够增强地块规模、经营规模和连片规模扩大对减施的促进作用。据此,农业减量化,应鼓励农户开展连片种植,形成生产性服务的市场容量,然后诱导服务供应商提供专业化服务,进而实现服务规模经营对农地规模经营的替代。     

What drives managers to insource production? Evidence from a behavioural experiment

Insourcing to countermand previous outsourcing decisions is becoming a widespread practice among firms. While the underlying performance drivers for firms (e.g., lead times, responsiveness, or security of supply) are well understood, the behavioural aspects underlying managerial decision-making processes regarding insourcing remain overlooked in empirical research. We study the effects of managers' attitudes toward insourcing, their perceived behavioural control (PBC) over the respective insourcing decision, and the effect of mimetic pressure on insourcing decision intentions and behaviour, while grounding our model in the Theory of Planned Behaviour (TPB). We test hypotheses with data gathered in a vignette-based experiment among 145 managers and apply stepwise regression analysis to find support for the positive effects of attitude and mimetic pressure on intentions to insource. Our results found no support for the effect of managers’ PBC. We find moderation effects among the internal drivers (attitude and PBC) and between internal and external drivers (attitude and mimetic pressure) on insourcing behaviour. With these findings, we provide evidence of a unique boundary condition to the TPB in the insourcing context by explaining supply chain design choices with neo-classical and behavioural theory. We emphasize important behavioural aspects in insourcing decision-making and caution supply managers in this regard.     

Why has China’s vertical specialization declined?

Vertical specialization (VS) is quantified by the VS share, which measures the average import content per dollar of exports. A characteristic of China’s export trade is its strong dependence on assembly and processing activities. To take proper account of this, China’s VS shares should explicitly distinguish processing export production from other production. We estimate China’s annual VS shares from 2000 to 2012—the latest year for which a special input–output table is available that makes such an explicit distinction. We find that VS shares increased from 2000 to 2004 and subsequently started to decrease. To explore why it has declined, we introduce a new structural decomposition approach. We find that the decrease of the VS share appears to have been driven mainly by the substitution of imported intermediates by domestic products. This occurred in particular in the production of exports, which implies an upgrading of China’s position in global value chains.     

Vertical separation of transmission control and market efficiency in the wholesale electricity market

This study examines how vertical separation of transmission control affects the wholesale market efficiency in the electric power industry. We analyze a unique regional electricity wholesale market in the U.S. where initially restructuring only occurred in the transmission sector. Following a commonly-used best dispatch model (Wolfram, 1999; Borenstein et al., 2002), we simulate competitive benchmark prices and compare with the best estimates available for actual prices to measure price-cost markups of the wholesale market. Empirical results demonstrate that the vertical separation of transmission control led to a significant increase in market markups in peak-load hours, documenting evidence of enhanced market power. Although we also find a reduction in the price-cost margin in low-demand hours, we reserve caution for this finding.     

智慧专业化视角下区域资源集聚与区域创新驱动发展

传统发展动力逐渐式微，创新驱动成为区域经济发展的新引擎。走创新驱动发展道路，需要新的经济理论解释、构建并指导各区域经济增长方式和发展模式转型。智慧专业化是一种新兴经济理论，能够较好解释区域创新驱动发展的内在动力。智慧专业化有效支撑区域资源集聚与区域创新驱动发展相关性研究，从资源内存性和外向性、资源技术和经济属性以及资源支持程度3个方面，论述区域创新驱动发展的动力来源与动力持续性，进而解释区域创新驱动发展资源集聚对区域创新驱动发展绩效的影响。     

Free add-on services and perceived value in competitive environments: Evidence from online hotel reviews

This study investigates how free add-on services affect customers’ perceived value in horizontal and vertical competition. We collected 349,879 reviews about over 3000 hotels in 25 U.S. cities from TripAdvisor. Using three balanced data sets generated by coarsened exact matching, the ordered logistic regressions show that free hotel add-on services (including free breakfast, parking, and WiFi) positively affect consumers’ perceived value. However, increased horizontal and vertical competition differentially weakens the positive effects of free add-on services. We not only observe a negative moderating effect of horizontal competition, but also identify three patterns of the marginal effects of these three add-ons in horizontal competition. The moderating effect of vertical competition exists from the higher-grade hotel segment to a lower-grade hotel, but such an effect is insignificant from the lower-grade hotel segment to a higher-grade hotel. Therefore, hotel managers should consider diverse external competitive environments and design appropriate differentiated service strategies.     

Organization,technology and management innovations through acquisition in China’s pork value chains: The case of the Smithfield acquisition by Shuanghui

This paper reviews the changes in Shuanghui’s operations after the Smithfield acquisition as well as transformations in China’s pork industries. As income grows and diets change, there has been an increasing demand for high-quality pork and more processed pork products. However, China’s swine and pork industries are still at an early stage of development as evidenced by the low market concentration, intensive use of labour, a proliferation of intermediaries, and low levels of technology. Bounded by the established consumer preferences for freshness and the status quo in the midstream and upstream segments, Shuanghui is in a slow process of upgrading its domestic operations with Smithfield’s leading brands, import of chilled and frozen pork, advanced technologies, and the vertically integrated business model after this acquisition. In particular, it remains unclear whether Shuanghui can follow Smithfield’s experience to establish stable and safe hog supplies by multiplying self-owned hog farms, maintain and expand its current contracts with large-scale commercial hog farms, or rely more on global sourcing of pork primarily from the U.S.