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Vertical Specialization and Industry Structure in High Technology Industries (2004)
| Venue: | BUSINESS STRATEGY OVER THE INDUSTRY LIFECYCLE, ADVANCES IN STRATEGIC MANAGEMENT |
| Citations: | 16 - 0 self |
BibTeX
@MISC{Macher04verticalspecialization,
author = {Jeffrey T. Macher and David C. Mowery},
title = {Vertical Specialization and Industry Structure in High Technology Industries},
year = {2004}
}
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Abstract
We examine the evolution of vertical specialization in three industries: chemicals, computers, and semiconductors. Vertical specialization is the restructuring of industry-wide value chains, such that different stages of the development, production, and marketing processes are controlled by different firms, rather than being vertically integrated within the boundaries of individual firms. In some cases, vertical specialization may span international boundaries and is associated with complex international production networks. After decades of vertical specialization, firms in the chemical industry appears to be re-integrating stages of the value chain. By contrast, the semiconductor and computer industries have experienced significant vertical specialization during the past ten years. We examine how and why these contrasting trends in vertical specialization have coevolved with industry maturation and decline, and underscore the importance and role of both industry factors and business strategies necessary for industries to become more specialized. We also consider the effects of vertical specialization on the sources of innovation and the geographic redistribution of production and other activities. We conclude that the evolution of vertical specialization in these three industries has both reflected and influenced the strategies of leading firms, while also displaying industry- specific characteristics that are rooted in their different technological and market characteristics.
Keyphrases
vertical specialization industry structure high technology industry past ten year industry maturation different stage chemical industry industry factor international boundary computer industry geographic redistribution industry-wide value chain significant vertical specialization market characteristic value chain complex international production network re-integrating stage individual firm leading firm industry specific characteristic different firm business strategy marketing process
