Vertical Integration

Summary of Vertical Integration

Also known as vertical expansion, the incorporation into a business or economy of earlier or subsequent stages in the channel of production. For example, a chemical producer may undertake (backward) vertical integration by producing its own petroleum as raw material or may pursue (forward) vertical integration by converting the chemicals manufactured into finished plastics.

(Main Author: William J. Miller)

Vertical Integration and International Trade Economy

In relation to international trade economy, Christopher Mark (1993) provided the following definition of Vertical Integration: The combination within one firm of two or more different stages in the production process of a particular good or service.

Resources

See Also

• Enterprise
• Joint Enterprise
• Joint Venture