Overlapping ownership and product innovation

Rune Stenbacka; Geert Van Moer

doi:10.1016/j.ijindorg.2023.102980

Overlapping ownership and product innovation

Rune Stenbacka^*
, Geert Van Moer

^*Corresponding author for this work

Economics, Helsinki

Research output: Contribution to journal › Article › Scientific › peer-review

12 Citations (Scopus)

Abstract

We characterize the effect of overlapping ownership (OO) on investments in drastic product innovation. The success probability of innovation increases with investment. We analyse two opposing forces: (1) OO induces firms to internalize that success on their own behalf erodes the rivals’ business, reducing investments; (2) OO softens competition in the product market, enhancing investments. Our analysis reveals that the competition-softening effect, by stimulating investments, can induce OO to benefit consumers, in particular when the R&D projects are complex. We also show that an incumbent technology raises the threshold required for OO to stimulate investments in innovation.

Original language	English
Article number	102980
Peer-reviewed scientific journal	International Journal of Industrial Organization
Volume	89
ISSN	0167-7187
DOIs	https://doi.org/10.1016/j.ijindorg.2023.102980
Publication status	Published - 09.06.2023
MoE publication type	A1 Journal article - refereed

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 9 Industry, Innovation, and Infrastructure

Keywords

512 Business and Management
common ownership
cross-ownership
product innovation
competition

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10.1016/j.ijindorg.2023.102980Licence: CC BY

1-s2.0-S0167718723000619-mainFinal published version, 0.99 MBLicence: CC BY

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Overlapping ownership and product innovation

Abstract

UN SDGs

Keywords

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