Preemption plays a crucial role in arms merger decisions. The author studies whether and under which circumstances preemptive merging occurs in vertically related industries. He finds that vertical mergers often preempt horizontal mergers and are dominant outcomes. Preempting the threat of a detrimental horizontal integration may be the main reason for vertically integrating. Copyright 1995 by Blackwell Publishing Ltd.
free text keywords: Economics and Econometrics, Accounting, General Business, Management and Accounting, Industrial organization, Business, Horizontal and vertical, Preemption, Merge (version control), Horizontal integration