?url_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Adc&rft.relation=http%3A%2F%2Feprints.imtlucca.it%2F1868%2F&rft.title=Business+Groups+as+Hierarchies+of+Firms%3A+Determinants+of+Vertical+Integration+and+Performance&rft.creator=Altomonte%2C+Carlo&rft.creator=Rungi%2C+Armando&rft.subject=HB+Economic+Theory&rft.subject=HD+Industries.+Land+use.+Labor&rft.description=We+explore+the+nature+of+Business+Groups%2C+that+is+network-like+forms+of+hierarchical+organization+between+legally+autonomous+firms+spanning+both+within+and+across+national+borders.+Exploiting+a+unique+dataset+of+270%2C474+headquarters+controlling+more+than+1%2C500%2C000+(domestic+and+foreign)+affiliates+in+all+countries+worldwide%2C+we+find+that+business+groups+account+for+a+significant+part+of+value-added+generation+in+both+developed+and+developing+countries%2C+with+a+prevalence+in+the+latter.+In+order+to+characterize+their+boundaries%2C+we+distinguish+between+an+affiliate+vs.+a+group-level+index+of+vertical+integration%2C+as+well+as+an+entropy-like+metric+able+to+summarize+the+hierarchical+complexity+of+a+group+and+its+trade-off+between+exploitation+of+knowledge+as+an+input+across+the+hierarchy+and+the+associated+communication+costs.+We+relate+these+metrics+to+host+country+institutional+characteristics%2C+as+well+as+to+the+performance+of+affiliates+across+business+groups.+Conditional+on+institutional+quality%2C+a+negative+correlation+exists+between+vertical+integration+and+organizational+complexity+in+defining+the+boundaries+of+business+groups.+We+also+find+a+robust+(albeit+non-linear)+positive+relationship+between+a+group's+organizational+complexity+and+productivity+which+dominates+the+already+known+correlation+between+vertical+integration+and+productivity.+Results+are+in+line+with+the+theoretical+framework+of+knowledge-based+hierarchies+developed+by+the+literature%2C+in+which+intangible+assets+are+a+complementary+input+in+the+production+processes.%0D%0A&rft.publisher=European+Central+Bank+&rft.date=2013-06&rft.type=Working+Paper&rft.type=NonPeerReviewed&rft.format=application%2Fpdf&rft.language=en&rft.identifier=http%3A%2F%2Feprints.imtlucca.it%2F1868%2F1%2FEuropean%2520Central%2520Bank_Rungi2013.pdf&rft.identifier=++Altomonte%2C+Carlo+and+Rungi%2C+Armando++Business+Groups+as+Hierarchies+of+Firms%3A+Determinants+of+Vertical+Integration+and+Performance.++Working+Paper++%231554%2F2013++++European+Central+Bank+++++ISSN+1725-2806.++++++&rft.relation=http%3A%2F%2Fwww.google.it%2Furl%3Fsa%3Dt%26rct%3Dj%26q%3D%26esrc%3Ds%26source%3Dweb%26cd%3D3%26cad%3Drja%26ved%3D0CE0QFjAC%26url%3Dhttp%253A%252F%252Fwww.ecb.europa.eu%252Fpub%252Fpdf%252Fscpwps%252Fecbwp1554.pdf%26ei%3DlBR6Uqr3B6Sv4QTdhoHgBQ%26usg%3DAFQjCNHY45OC5HqerI2t1xpOiRhYBHXvdA%26sig2%3DBeGYx7Qoy0uQkwpEHW5Qyw%26bvm%3Dbv