Welfare raising common ownership with supply chains

Qing Hu () and Tomomichi Mizuno
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Qing Hu: Kansai University

No 2521, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: Even though the welfare-reducing effects of common ownership have been emphasized in the established researches, we challenge this well-known result by considering a model of two symmetric supply chains, each composed of a manufacturer and its firm-specific input supplier. The common ownership exists in the downstream market. We find that if the degree of common ownership is high, the demand for input becomes elastic, intensifying input price competition. Therefore, the consumer and total surpluses will increase with the degree of common ownership.

Pages: 23 pages
Date: 2025-09
New Economics Papers: this item is included in nep-com and nep-mic
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