Vertical disintegration of production and the rise of market for brands

Abstract

The emergence of a market for brands is a relevant economic phenomenon that creates entrepreneurial opportunities. In this research, we explore the relationship between the size of market for brands and the vertical disintegration of production, as antecedent of the rise of market for brands. We take an industry-level perspective and focus on trademark transactions in the US as the empirical setting for our analysis. The results uncover a positive relationship between the degree of industry vertical disintegration and the size of market for brands. We conclude with examples of how a market for brands creates entrepreneurial opportunities.