# name
Which firms are involved in foreign vertical integration? [WP-IEB]

# metadata.dc.description.abstract[].value
In line with the literature that considers that transaction costs, asset specificity and incomplete contracts play a key role in the “make or buy decision”, this paper seeks to discriminate the characteristics of firms that make them more or less likely to integrate their activities in a foreign country. We draw on firm level data for Spanish manufacturing firms from the Survey on Business Strategies (ESEE), which enable us to identify whether their imports are intra-firm (related party) or at arm’s-length (non-related party). Our results show that candidates for vertical integration are the most productive firms and those that receive a large share of their inputs from headquarters. We also demonstrate that international experience and product differentiation favor foregin integration even after controlling for other characteristics of the firm.

# metadata.dc.rights[].value
cc-by-nc-nd, (c) Pelegrín Solé et al., 2012

# metadata.dc.source[].value
IEB (Institut d’Economia de Barcelona) – Working Papers

# metadata.dc.title[].value
Which firms are involved in foreign vertical integration? [WP-IEB]