English title: Vertical integration and social capital: Theory and empirics

Author(s): Marco Castellani -

Language: English

Type: Thesis / dissertation

Year: 2019

Abstract

We study the impact of social capital on vertical integration using information at the four-digit level for manufacturing sectors in 30 European countries. According to transaction cost theory, firms buy their inputs in the market rather than produce them internally if they do not fear to be cheated by their suppliers. Since social capital promotes trust and trustworthiness, we expect that the higher the level of social capital, the higher the reliance on external procurement of inputs. This prediction is confirmed by empirical analyses. Furthermore, we show that the impact of social capital is differentiated among industrial sectors.

Type/degree:

Awarding institution: Università degli studi di Udine

Number of pages: 0

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