Governance structure, technical change, and industry competition

Mattia Guerini, Philipp Harting and Mauro Napoletano

Journal of Economic Dynamics and Control, 2022, vol. 135, issue C

Abstract: We develop a model to study the impact of corporate governance on the investment decisions of firms and competition in an industry populated by publicly owned firms. A bargaining process between firm’s stakeholders determines the optimal allocation of financial resources between real investments in R&D and financial investments in shares buybacks. We characterize the relation between governance and investment strategy and we study how different governance structures shape technical progress and competition over the industrial life cycle. Numerical simulations of a calibrated set-up of the model show that pooling together industries characterized by heterogeneous governance structures generate the well-documented inverted-U shaped relation between competition and innovation.

Keywords: Governance structure; Industry dynamics; Competition; Technical change (search for similar items in EconPapers)
JEL-codes: G34 L22 M12 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Governance Structure, Technical Change and Industry Competition (2020)
Working Paper: Governance structure, technical change and industry competition (2020)
Working Paper: Governance structure, technical change and industry competition (2020)
Working Paper: Governance structure, technical change and industry competition (2020)
Working Paper: Governance structure, technical change and industry competition (2020)
Working Paper: Governance structure, technical change and industry competition (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:135:y:2022:i:c:s0165188921002293

DOI: 10.1016/j.jedc.2021.104294

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