Common Ownership in Production Networks

Matteo Bizzarri and Fernando Vega-Redondo
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Fernando Vega-Redondo: Bocconi University and BIDSA.

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: We characterize the firm-level welfare effects of a small change in ownership overlap, and how it depends on the position in the production network. The effect is heterogeneous depending on the position in the production network. In a horizontal economy, the firm for which a small change in ownership overlap is larger is the firm with larger markup. Instead, if there are vertical inter-firm relationships, the effect depends on the network position, and tends to be higher upstream. If a planner can affect ownership over-lap with some adjustment costs, the optimal intervention is proportional to the Bonacich centrality of each firm in the weighted network quantifying interfirm price-mediated externalities.

Keywords: production networks; network games; common ownership; oligopoly. (search for similar items in EconPapers)
JEL-codes: D43 D57 D85 L13 L16 (search for similar items in EconPapers)
Date: 2024-03-14, Revised 2025-10-16
New Economics Papers: this item is included in nep-com, nep-gth, nep-ind and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Common Ownership in Production Networks (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:707

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