Vertical integration as a remedy for imbalances in the 'Porterian' value system: The Dutch financial securities industry at the beginning of the 20th century

Janneke Hermans, Nachoem M. Wijnberg, Onno de Wit, Jan van den Ende

Research output: Contribution to journalArticleScientificpeer-review

Abstract

The way of accounting for vertical integration, of this paper is based on the ‘Porterian’ value system and focuses on the relation between the creation and appropriation of value. The essence of a value system is that at each stage in the system value is created and added to the value created at previous stages. We propose that firms which are unable to appropriate the value they create at the stage they currently inhabit, would find it advantageous to integrate vertically towards stages offering a more attractive relation between value appropriation and value creation. This argument will be illustrated here by the case of a large Dutch bank that integrated vertically towards securities trading.
Original languageEnglish
Pages (from-to)357-374
Number of pages18
JournalScandinavian Journal of Management
Volume20
Issue number4
DOIs
Publication statusPublished - 2004
Externally publishedYes

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