【公开学术报告-第146期】History, Strategy, and Organizational Design: Vertical Integration Decisions Under Supplier Industry Consolidation

History, Strategy, and Organizational Design: Vertical Integration Decisions Under Supplier Industry Consolidation

Speaker: Liuyi WANG (Ph.D. Candidate in Marketing, University of Arizona)

Date & Time: Thur. 30, October 2025, from 14:00 to 15:30 (Beijing Time)

Place: Tongji Building A2101 

ABSTRACT

With an increase in mergers and acquisitions between competitors in a supply chain, managers and policy makers are concerned about the “ripple effect” of changes in the competitive market structure on other parts of the supply chain. This study examines how downstream firms adjust their vertical boundaries as a response to consolidation in their upstream supplier industry. The authors develop a framework suggesting that the downstream firm’s response will be strategic and heterogeneous and depend on its current relationship with suppliers and key firm-specific characteristics. Hypotheses are tested using a comprehensive dataset of 15,744 firms and 91,788 firm-supplier-industry pairs over 10 years. The results show that while the likelihood of vertically integrating with a supplier increases with the level of consolidation in that supplier industry, firms with longer-standing relationships with existing suppliers are less likely to do so. Such relationships provide coordination and adaptation benefits that preclude the need for vertical integration to upstream consolidation shocks. Furthermore, the results show that this relationship effect is more pronounced for client firms with higher levels of R&D intensity and those having a more specialized business portfolio, since securing strategic value from these firm-specific characteristics requires deeper value chain coordination with suppliers.

Keywords: Supplier Industry Consolidation; Vertical Integration; Supply Chain Ripple Effect; Long-term Supplier Relationships; R&D Intensity; Specialization

GUEST BIO:

LIUYI WANG is a Ph.D. candidate in Marketing (Minor: Econometrics) at the Eller College of Management, University of Arizona (Aug. 2021 – May 2026 expected). She previously earned a Master of Science in Econometrics and Quantitative Economics from the same institution (Aug. 2018 – Dec. 2019). She also holds a Bachelor of Social Science in Economics with First Class Honors from the Division of Social Sciences at Hong Kong Baptist University (August 2016 – July 2018). Her research examines how firms and individuals adapt to environmental “structural changes” (e.g., market consolidation, policy interventions). She focuses on topics like organizational boundaries, healthcare management, and public policy. She leverages econometrics, causal inference, and machine learning to uncover behavioral and strategic mechanisms at both firm and individual levels.