Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/265095 
Year of Publication: 
2022
Series/Report no.: 
DICE Discussion Paper No. 391
Publisher: 
Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE), Düsseldorf
Abstract: 
We study the incentives of firms that hold partial vertical ownership to foreclose rivals. Compared to a full vertical merger, with partial ownership, a firm may obtain only part of the target's profit but may nevertheless be able to influence the target's strategy significantly. The target may be either a supplier or a customer, which opens the scope for either input foreclosure or customer foreclosure. We show that the incentives to foreclose can be higher, equal, or even lower with partial ownership than with a vertical merger, depending on how the protection of minority shareholders and transfer price regulations are specified.
Subjects: 
Backward ownership
Entry deterrence
Foreclosure
Minority shareholdings
Partial ownership
Uniform pricing
Vertical integration
JEL: 
G34
L22
L40
ISBN: 
978-3-86304-390-2
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.