ABSTRACT
The objective of this work is twofold: firstly, to study if the characteristics of the industry affect certain financial and strategic decisions of manufacturing firms and, secondly, to determine if the strategy of diversifying the activity through vertical integration generates good financial results in times of crisis, depending on the industry. To this end, an analysis is carried out with panel data from 9,523 firms in the period between 2008 and 2013. The results show that there are different strategies that firms must follow, depending on the industry to which they belong. In sectors with lower operational risk, those firms characterized by greater specificity and better product quality obtained higher profitability. However, in riskier sectors, firms with more specific assets assumed too many risks and in times of crisis have seen their profitability fall. Likewise, it is observed that the decision to integrate vertically has mitigated the weak points of each sector, allowing firms to better weather the economic–financial crisis in which this research is framed.
Disclosure statement
No potential conflict of interest was reported by the authors.
ORCID
Alfredo Grau http://orcid.org/0000-0002-3710-9101
Notes
1. See Williamson (Citation1986).
2. The vertical integration strategy can also be carried out through contracts between several companies. See Salinas and Huerta (Citation1999).
3. See Fernández, Rosell, and Espitia (Citation2009).
4. See, among others, Bhuyan (Citation2005), Fernández, Rosell, and Espitia (Citation2009).
5. Díaz and Rodríguez (Citation2005), Rodríguez (Citation2010), and Torrent–Sellens and Díaz–Chao (Citation2013) through the SEPI Foundation (Sociedad Estatal de Participaciones Industriales).
6. Group 23 is the manufacturing sector for non–metallic mineral products such as glass, ceramics, cement, concrete or plaster, products that are highly dependent on the construction sector.
7. Neter, Wasserman, and Kutner (Citation1989) point out that individual values for VIF greater than ten indicate multicollinearity problems, as well as an average value greater than six.
8. See, among others, Hernández de Cos and Hernando (Citation1999), Bahillo (Citation2000), Rodríguez (Citation2008), García and Martínez (Citation2010) and Grau and Reig (Citation2014).
9. Mixed logit models assume a general distribution for X, meaning m can assume a number of distributional forms like normal, log-normal or triangular.
10. See, among others, Pestana, Ferreira, and Williams (Citation2007).
11. We are assuming in equation (2) that E(εj)=0.