Abstract:

The objective of this paper is to shed some light on the determinants and consequences of firms’ vertical integration of over 130 Algerian manufacturing firms in the food supply chain. The dataset provides thorough information on firm’s internal characteristics which is based directly on managers’ responses to survey questions. Through some empirical measures of firm’s internal characteristics, we based our study on the hypothesis stipulating that the vertical integration of food firms is strongly determined by their size, their performance, and their innovativeness. Results of this research show that, on the one hand, small and less innovative food firms have a great potential for vertical extending of the market. On the other hand, the innovativeness capacity of these firms has strong effects on their vertical integration willingness in the food supply chain.