We show that duopolistic innovation competition between identical firms may lead to an equilibrium with asymmetric corporate governance modes with one firm being shareholder oriented and its rival stakeholder oriented. This happens if the benefit associated with innovation success faced by the stakeholders falls short of an endogenously determined threshold. Above this threshold, the corporate governance equilibrium is symmetric with both firms oriented toward maximization of shareholder value.
- 511 Economics
- corporate governance
- stakeholder versus shareholder