Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/287482 
Year of Publication: 
2021
Citation: 
[Journal:] Review of Industrial Organization [ISSN:] 1573-7160 [Volume:] 60 [Issue:] 1 [Publisher:] Springer US [Place:] New York, NY [Year:] 2021 [Pages:] 109-145
Publisher: 
Springer US, New York, NY
Abstract: 
When knowledge sharing is non-contractible, we show that competing downstream firms may prefer to help improve an inefficient alternative supply source than help to improve the technology of the efficient actual supplier—even if this is costless. A downstream firm can have incentives to decrease the efficiency of the actual supplier in order to improve its outside options. Non-controlling partial backward ownership can—through the participation of the downstream firm(s) in the upstream profits—align the incentives of the supplier and its competing customers. This improves industry performance while simultaneously benefiting consumers. Partial backward ownership has similar effects as strengthening a downstream firm's bargaining power and making knowledge sharing contractible.
Subjects: 
Innovation
Knowledge sharing
Minority shareholdings
Supply chain efficiency
Vertical partial ownership
JEL: 
L22
L40
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

Files in This Item:
File
Size





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