The economic efficiency of backward vertical integration in the international petroleum refining industry
A benefit of backward vertical integration in the petroleum refining industry is reduced uncertainly in the supply of crude oil for refining. However, there is no a priori reason to believe that refiners are more skilful in managing combined refining and crude oil production operations than are spec...
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| Veröffentlicht in: | Applied economics 1993-12, Vol.25 (12), p.1529-1539 |
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| creator | Al-Obaidan, Abdullah M. Scully, Gerald W. |
| description | A benefit of backward vertical integration in the petroleum refining industry is reduced uncertainly in the supply of crude oil for refining. However, there is no a priori reason to believe that refiners are more skilful in managing combined refining and crude oil production operations than are specialists in these functions. Using the concept of frontier production functions, efficiency differences between firms with differing degrees of backward vertical integration are estimated. Backward vertical integration improves scale efficieny and reduces business risk significantly, but it reduces both technical and overall economic efficiency. This is the first comprehensive empirical test of the efficiency of vertical integration in the literature. |
| doi_str_mv | 10.1080/00036849300000157 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 0003-6846 |
| ispartof | Applied economics, 1993-12, Vol.25 (12), p.1529-1539 |
| issn | 0003-6846 1466-4283 |
| language | eng |
| recordid | cdi_proquest_journals_212629018 |
| source | Business Source Complete; Periodicals Index Online; Taylor & Francis Journals Complete |
| subjects | Crude oil Economic efficiency Economic theory Economics Efficiency Impacts Manycompanies Manycountries Oil refining Oil reserves Petroleum industry Production functions Refineries Statistical analysis Vertical integration |
| title | The economic efficiency of backward vertical integration in the international petroleum refining industry |
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