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

7 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

Keywords

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

UN SDGs

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

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Overlapping ownership and product innovation

Abstract

Keywords

UN SDGs

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