Academic contributions so far analyzed various business models in the first place of the former perspective, while there was little literature to their impact on the fair itself. By using a panel data set of 28 scholarships for the 1999-2003 period, we try to shed light on this issue by comparing the technical efficiency and factor productivity of exchanges with different business models.
Our findings suggest that the exchange of diversification into related activities are generally less efficient than exchanges remain focused on the cash market. In particular, we find no evidence that vertically integrated exchange more efficient. However, they seem a much stronger factor productivity growth than other business models possess.
This trend can mainly be observed between the highly profitable trading platforms. While the pursuit for diversification is probably motivated by the attractiveness of investment opportunities, it is still an open question whether certain integrationactivities are efficient, both from a social welfare and the exchange perspective.
We assume that the integration activity comes at the cost of increased operational complexity that potential synergies between related activities and thus leads to outweigh technical inefficiencies. Our findings contribute to the ongoing discussion about vertical integration.
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