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Dynamics of evolution in the global fuel-ethanol industry

Dynamics of evolution in the global fuel-ethanol industry

Chan, Jin Hooi ORCID: 0000-0002-6275-9763 and Reiner, David (2011) Dynamics of evolution in the global fuel-ethanol industry. [Working Paper]

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Abstract

We employ a value chain analysis approach to examine the forces shaping the industry structure, entry and inter-firm governance modes. Forty largest global and regional companies in the ethanol manufacturing stage have been classified according to their pre-entry industry of origin. Firms with pre-entry history in feedstock supply have shown higher resilient to market shock especially compared to de novo firms. In addition, we observe a trend of dual-directional vertical integration. Firms backward integrate to secure feedstock supply; firms forward integrate to gain access to the retail market. Security of feedstock has been identified as a critical success factor of the manufacturer in this resource intensive industry. Another critical success factor is gaining control over the end user market via forward integration. We propose that critical success factor is the important determinants of inter-firm governance mode.

Item Type: Working Paper
Uncontrolled Keywords: Inter-firm governance, Biofuels, New entry, Vertical integration
Faculty / Department / Research Group: Faculty of Business > Supply Chain Management Research Group
Last Modified: 14 Oct 2016 09:37
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
URI: http://gala.gre.ac.uk/id/eprint/14964

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