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Vertical integration in the real estate sector: three Swedish case studies

Hans Lind (Department of Building and Real Estate Economics, Royal Institute of Technology, Stockholm, Sweden)

Journal of European Real Estate Research

ISSN: 1753-9269

Article publication date: 7 August 2017



The purpose of this paper is to explain why some real estate companies choose to have a vertically integrated structure, instead of specializing in only stage of the production chain.


The first stage of the research was an extensive literature review to generate hypotheses. A case study method was then chosen, as more detailed knowledge about the companies were judged to be needed to evaluate the different hypothesis. Documents about the companies were studied and interviews carried out.


In the studies cases, there is no support for theories related to vertical integration as a way to monopolize a market and only marginal support for theories that focus on contracting problems related to the so called hold up problem. The most important factors for the companies were that vertical integration gives information and more options that are important in small number bargaining situations. The companies bargaining power increases when they are better informed about, e.g. costs and profits in nearby activities, and when they can use in-house units, if there are problems to find reasonable conditions on the outside market.

Research limitations/implications

The main limitation is that only three cases were studied.


The study can be helpful both to companies that choose to integrate vertically and those that chose not to. There are similar problems related to information and bargaining power that needs to be handled.


This is the first study that test theories about vertical integration in the real estate sector.



Lind, H. (2017), "Vertical integration in the real estate sector: three Swedish case studies", Journal of European Real Estate Research, Vol. 10 No. 2, pp. 195-210.



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