Vertical restraints of multinational consulting firms in China

In the past twenty years, vertical restraints have been widely adopted by many multinational firms in the manufacturing sector. Vertical restraints help firms gain more control and reduce transaction costs. However, vertical restraints have not attracted much attention in the consulting service industry. This paper firstly investigates the vertical restraints of multinational consulting firms in China. The paper explores why vertical restraints exist and how they work in the Chinese consulting market. Then the paper analyzes the effects of vertical restraints employed by multinationals. This paper ends by presenting the suggestion for the further development of Chinese consulting market. ©2010 IEEE.