Product innovation transfer under passive partial ownership holdings

Konstantinos Papadopoulos, Emmanuel Petrakis and Panagiotis Skartados

Economics Letters, 2019, vol. 177, issue C, 22-25

Abstract: We investigate the incentives of a high-quality firm to transfer for free its proprietary product innovation technology to its standard-quality rival on which it has passive partial ownership holdings (PPOs). We identify the conditions under which there exists an ownership threshold to make such a free transfer profitable for the high-quality firm and show that these conditions are more stringent under Bertrand than under Cournot competition. Finally, we show that technology transfer increases aggregate output, industry-wide profits, consumers surplus, and social welfare.

Keywords: Passive partial ownership; Product innovation; Technology transfer; Imperfectly competitive markets (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:177:y:2019:i:c:p:22-25

DOI: 10.1016/j.econlet.2019.01.008

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