Strategic Effect of Capacity Choice in a Vertical Structure

Oh Joonghwa

doi:10.24747/jma.31.1_109

Bibliographic Information

Other Title

川下企業の生産能力の選択と戦略効果

Abstract

<p>This study investigates the strategic disclosure of capacity choices made by downstream firms competing in quantities. In a competitive product market, the capacity choice, as a pre-production commitment, can convey the information about firm’s production decision to market participants. I show that the downstream firm withholds its capacity information and chooses a higher capacity level than under disclosure if the products become sufficiently homogenous. This is because a non-disclosure would convey a more aggressive production level than under disclosure to its rival firm. As the products become differentiated, however, the downstream firm chooses to disclose its capacity and a lower capacity level than under non-disclosure. This leads to a decrease in an input price by revealing a low production level to an upstream firm.</p>

Journal

The Journal of Management Accounting, Japan

The Journal of Management Accounting, Japan 31 (1), 109-125, 2023-03-28

The Japanese Association of Management Accounting

Keywords

Details 詳細情報について

CRID: 1390295568881203200

DOI: 10.24747/jma.31.1_109

ISSN: 24340529; 09187863

Text Lang: ja

Data Source

JaLC
KAKEN

Abstract License Flag: Disallowed

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