| Abstract: | Many scholars have argued that the ownership of sequential stages in goods production fragmented in the 1980s, although few scholars have produced concrete evidence substantiating vertical disintegration. In this study, two measures are used to estimate vertical integration in U.S. manufacturing sectors in 1977 and 1987. Total vertical integration is the proportion of all shipments in a manufacturing sector dispatched by establishments to all other establishments belonging to the same companies. Manufacturing vertical integration estimates the proportion of manufacturing shipments that firms internalize. Both measures are calculated for aggregate manufacturing and all two-digit manufacturing sectors. Manufacturing vertical integration is also calculated for 79 four-digit producer goods sectors. Results show that the level of vertical integration in aggregate manufacturing was modest in 1977 and that a small decline occurred in the following decade. Individual manufacturing sectors underwent both vertical integration and disintegration in the period. The findings cast doubt on the claim in the flexible specialization thesis that ownership in production chains generally splintered in the 1980s. |
