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Subcontracting and vertical integration in the Spanish cotton industry 1
Author(s) -
ROSÉS JOAN R.
Publication year - 2009
Publication title -
the economic history review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.014
H-Index - 49
eISSN - 1468-0289
pISSN - 0013-0117
DOI - 10.1111/j.1468-0289.2008.00428.x
Subject(s) - vertical integration , transaction cost , factory (object oriented programming) , business , production (economics) , industrial organization , weaving , database transaction , core (optical fiber) , horizontal integration , spinning , agricultural economics , commerce , economics , engineering , marketing , finance , microeconomics , computer science , mechanical engineering , programming language , telecommunications
This paper examines changes in the organization of the Spanish cotton industry from 1736 to 1860 in its core region of Catalonia. As the Spanish cotton industry adopted the most modern technology available and experienced the transition to the factory system, cotton spinning and weaving mills became increasingly vertically integrated. Asset specificity, more than other factors, explains this tendency towards vertical integration. The probability of a firm being vertically integrated was higher among firms located in districts with high concentration ratios, and rose with size and the use of modern machinery. At the same time, subcontracting predominated in other phases of production and distribution, where transaction costs appear to be less important.