Integration and Productivity: Satellite-Tracked Evidence

This paper introduces satellite-tracked real-time data from a large fishing firm managing its vertically, horizontally, and geographically linked ships to study the causal impact of integration on total factor productivity (TFP) after the firm acquired its vertically unintegrated contractual fish su...

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Bibliographic Details
Published in:Management science 2014-07, Vol.60 (7), p.1698-1718
Main Author: Natividad, Gabriel
Format: Article
Language:English
Subjects:
Agricultural industry
Analysis
Anchovies
boundaries of the firm
Business entities
Communication satellites
Economic aspects
economics
Fish industry
Fish scales
Fisheries
Fishery industry
Fishery management
Fishing industry
Geographic information systems
Impact analysis
Industrial plants
Industrial productivity
Management science
organizational studies
Ownership changes
Ports
Production data
Production management
Productivity
Ships
strategy
Studies
Suppliers
Total factor productivity
Vertical integration
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Summary:This paper introduces satellite-tracked real-time data from a large fishing firm managing its vertically, horizontally, and geographically linked ships to study the causal impact of integration on total factor productivity (TFP) after the firm acquired its vertically unintegrated contractual fish suppliers. TFP increased 16% among newly integrated ships, whereas it did not vary for already owned ships. Some classic mechanisms such as increased effort due to monitoring do not systematically explain TFP gains under integration, whereas evidence on hold-up threat alleviation is mixed. Importantly, enhanced knowledge transfer and hierarchical authority enacting productivity-improving operational practices among newly integrated ships are more likely explanations of the results. This paper was accepted by Bruno Cassiman, business strategy.
ISSN:0025-1909
1526-5501
DOI:10.1287/mnsc.2013.1833