Vertical Collaboration and the Performance of Knowledge-Based Products: Evidence from the Korean TV Drama Industry

This paper provides theory and evidence about how vertical collaboration between an integrated firm and a focused supplier enhances the market performance of knowledge-based products. We posit that, when downstream commercialization is concentrated relative to upstream product development, products developed via vertical collaboration will exhibit better market performance than products developed autonomously by an integrated firm. Using data from the Korean TV drama industry, we find qualitative and quantitative evidence that collaborative development between network companies and independent production companies improves the viewership ratings of TV dramas. By elucidating a novel connection between corporate strategy and performance, the paper advances our understanding of how organization influences product performance.