Supply chain innovations and partial ownership

Matthias Hunold and Shiva Shekhar

No 281, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

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.

Keywords: knowledge spillover; innovation; minority shareholdings; supply chain efficiency; vertical partial ownership (search for similar items in EconPapers)
JEL-codes: L22 L40 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-com, nep-ind and nep-ino
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Citations: View citations in EconPapers (5)

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Journal Article: Supply Chain Innovations and Partial Ownership (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:281

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