the impact of technological interdependency on contracting complementarities evidence from automobile product development by sharon novak kellogg school management s northwestern edu scott stern brookings and nber stern2 draft march 2003 this paper examines complementarity across systems in industry while most empirical research assumes that each governance choice is independent other cross system integration incentive problems within suggest potential for choices firm develops implements an instrumental variables estimator which allows us to distinguish level fixed effects taking advantage determinants vertical calculate instruments we establish three findings first are clustered probability increases number vertically integrated second reduced form estimates rather than unobserved factors drivers correlation finally degree sensitive underlying technology
