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Vertical integration in the real estate sector: three Swedish case studies
KTH, School of Architecture and the Built Environment (ABE), Real Estate and Construction Management, Building and Real Estate Economics.
2017 (English)In: Journal of European Real Estate Research, ISSN 1753-9269, E-ISSN 1753-9277, Vol. 10, no 2, p. 195-210Article in journal (Refereed) Published
Abstract [en]

Purpose: The purpose of this paper is to explain why some real estate companies choose to have a vertically integrated structure, instead of specializing in only stage of the production chain. Design/methodology/approach: The first stage of the research was an extensive literature review to generate hypotheses. A case study method was then chosen, as more detailed knowledge about the companies were judged to be needed to evaluate the different hypothesis. Documents about the companies were studied and interviews carried out. Findings: In the studies cases, there is no support for theories related to vertical integration as a way to monopolize a market and only marginal support for theories that focus on contracting problems related to the so called hold up problem. The most important factors for the companies were that vertical integration gives information and more options that are important in small number bargaining situations. The companies bargaining power increases when they are better informed about, e.g. costs and profits in nearby activities, and when they can use in-house units, if there are problems to find reasonable conditions on the outside market. Research limitations/implications: The main limitation is that only three cases were studied. Practical/implications: The study can be helpful both to companies that choose to integrate vertically and those that chose not to. There are similar problems related to information and bargaining power that needs to be handled. Originality/value: This is the first study that test theories about vertical integration in the real estate sector.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2017. Vol. 10, no 2, p. 195-210
Keywords [en]
Construction companies, Industrial organization, Real estate companies, Vertical integration
National Category
Business Administration
Identifiers
URN: urn:nbn:se:kth:diva-216332DOI: 10.1108/JERER-07-2016-0029Scopus ID: 2-s2.0-85027305420OAI: oai:DiVA.org:kth-216332DiVA, id: diva2:1151208
Note

QC 20171023

Available from: 2017-10-23 Created: 2017-10-23 Last updated: 2017-10-23Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
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