The issue of whether vertical integration can raise market power is hotlydebated because firms have a market power-related incentive to integratevertically. Using a sample of U.S. food manufacturing industries, this“market power” motive is empirically tested in this study. Empiricalanalysis shows that forward vertical ownership integration (or verticalmergers) did not increase food manufacturers' market power in the finalproduct market. The study, however, shows that both market structure andconduct significantly influenced market power in the food industries.
