We study the relationship between firms’ output quality and organizational structure. Using data on the production and transaction chain that makes up Peruvian fish meal manufacturing, we establish three results. First, firms integrate suppliers when the quality premium rises for exogenous reasons. Second, suppliers change their behavior to better maintain input quality when vertically integrated. Third, firms produce a higher share of high-quality output when weather and supplier availability shocks shift them into using integrated suppliers. Overall, our results indicate that quality upgrading is an important motive for integrating suppliers facing a quantity-quality trade-off, as classical theories of the firm predict.

中文翻译：

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出口商的垂直整合、供应商行为和质量升级

我们研究了企业产出质量与组织结构之间的关系。使用构成秘鲁鱼粉制造的生产和交易链的数据，我们确定了三个结果。首先，当质量溢价因外生原因上升时，企业整合供应商。其次，供应商在垂直整合时改变他们的行为以更好地保持输入质量。第三，当天气和供应商可用性冲击将它们转移到使用集成供应商时，公司生产的高质量产品的份额更高。总的来说，我们的结果表明，正如公司的经典理论所预测的那样，质量升级是整合面临数量-质量权衡的供应商的重要动机。