Abstract
As a result of the rise in the raw materials market of 2007-08, steel-producing companies are re-thinking their purchasing of iron ore. Integration of upstream mining companies is one option for ensuring the supply of raw materials. This trend is being pursued mostly in the up-and-coming industrial companies of newly industrializing countries. In contrast, the steel companies of mature industrial countries are continuing to rely on the market. This variation in company strategies cannot be explained by current theories of vertical integration such as the Transaction Cost approach and the Global Value Chain approach. This only becomes possible by considering the diverse macroeconomic environment, which is characterized by high profit margins and high investment in the newly industrializing countries. Theoretically, this requires us to borrow arguments from FRANCOIS PERROUX'S Polarization Theory and arguments from ANDREAS PREDOHL'S theory of Economic Area Development. This paper contains an empirical investigation of vertical integration based on the steel and iron ore industries, and uses an Indian and a Chinese company as examples.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
