Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/174490
Authors: 
Hunold, Matthias
Shekhar, Shiva
Year of Publication: 
2018
Series/Report no.: 
DICE Discussion Paper 281
Abstract: 
We show that competing downstream firms may rather invest in their inefficient inhouse production than help improve the technology of the efficient supplier, even if this is costless. Even worse, a downstream firm can have strong incentives to decrease the efficiency of the supplier in order to improve its outside options. We demonstrate that non-controlling partial backward ownership can align the incentives of the supplier and its customers with respect to supply chain innovations.
Subjects: 
knowledge spillover
innovation
minority shareholdings
supply chain efficiency
vertical partial ownership
JEL: 
L22
L40
ISBN: 
978-3-86304-280-6
Document Type: 
Working Paper

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