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

^*Huvudförfattare för detta arbete

Nationalekonomi, Helsingfors

Forskningsoutput: Tidskriftsbidrag › Artikel › Vetenskaplig › Peer review

9 Citeringar (Scopus)

Sammanfattning

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.

Originalspråk	Engelska
Artikelnummer	102980
Referentgranskad vetenskaplig tidskrift	International Journal of Industrial Organization
Volym	89
ISSN	0167-7187
DOI	https://doi.org/10.1016/j.ijindorg.2023.102980
Status	Publicerad - 09.06.2023
MoE-publikationstyp	A1 Originalartikel i en vetenskaplig tidskrift

FN:s SDG:er

Detta resultat bidrar till följande hållbara utvecklingsmål:

SDG 9 – Hållbar industri, innovationer och infrastruktur

Nyckelord

512 Företagsekonomi

Åtkomst av dokument

10.1016/j.ijindorg.2023.102980Licens: CC BY

1-s2.0-S0167718723000619-mainPublicerad version, 0,99 MBLicens: CC BY

OpenUrl-tillgänglighet

Fulltext

Andra filer och länkar

Link to publication in Scopus

Citera det här

@article{c728d4fd62a24d3881c2f5d530fc9c74,

title = "Overlapping ownership and product innovation",

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{\textquoteright} 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.",

keywords = "512 Business and Management, common ownership, cross-ownership, product innovation, competition",

author = "Rune Stenbacka and \{Van Moer\}, Geert",

note = "Publisher Copyright: {\textcopyright} 2023 The Author(s)",

year = "2023",

month = jun,

day = "9",

doi = "10.1016/j.ijindorg.2023.102980",

language = "English",

volume = "89",

journal = "International Journal of Industrial Organization",

issn = "0167-7187",

publisher = "Elsevier BV * North-Holland",

}

TY - JOUR

T1 - Overlapping ownership and product innovation

AU - Stenbacka, Rune

AU - Van Moer, Geert

PY - 2023/6/9

Y1 - 2023/6/9

N2 - 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.

AB - 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.

KW - 512 Business and Management

KW - common ownership

KW - cross-ownership

KW - product innovation

KW - competition

UR - https://www.scopus.com/pages/publications/85162126855

U2 - 10.1016/j.ijindorg.2023.102980

DO - 10.1016/j.ijindorg.2023.102980

M3 - Article

SN - 0167-7187

VL - 89

JO - International Journal of Industrial Organization

JF - International Journal of Industrial Organization

M1 - 102980

ER -

Overlapping ownership and product innovation

Sammanfattning

FN:s SDG:er

Nyckelord

Åtkomst av dokument

OpenUrl-tillgänglighet

Andra filer och länkar

Fingeravtryck

Citera det här