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Energy Journal, Vol.21, No.2, 145-151, 2000
A note on vertical integration and stock ratings of oil companies in the US
This note examines some evidence for a link between profitability of oil companies and operational vertical integration into pipelines and crude oil, An empirical specification is estimated using ordered probit. Levels of integration into pipeline and crude that maximize stock ratings are derived using recent oil company data. Integration into pipelines has a weak positive effect on the stock ratings of oil companies, and integration into crude oil has a stronger positive effect.