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'''Vertical integration''' is the process by which a [[corporation]] acquires related businesses in a [[supply chain]]. For example, a [[steel]] mill may acquire a smelter, a mining corporation, and a [[transport]] network. This process is also referred to as "internalization"; the famous [[economist]] [[Ronald Coase]] theorized that, ideally, a firm would internalize all possible functions, until the [[transaction cost]] of internalizing outstripped the transaction cost of doing business with an unaffiliated firm.
'''Vertical integration''' is the process by which a [[corporation]] acquires related businesses in a [[supply chain]]. For example, a [[steel]] mill may acquire a smelter, a mining corporation, and a [[transport]] network. This process is also referred to as "internalization"; the famous [[economist]] [[Ronald Coase]] theorized that, ideally, a firm would internalize all possible functions, until the [[transaction cost]] of internalizing outstripped the transaction cost of doing business with an unaffiliated firm.
[[category:economics]]
[[Category:Economics]]