Knowledge Transfer and Partial Equity Ownership

Arghya Ghosh and Hodaka Morita ()

No 2012-18, Discussion Papers from School of Economics, The University of New South Wales

Abstract: When firms form an alliance, it often involves one firm acquiring an equity stake in its alliance partner. Such an alliance weakens competition, but induces knowledge transfer between partner firms. We explore oligopoly models that capture the link between knowledge transfer and partial equity ownership (PEO), where alliance partners can choose the level of PEO to connect themselves. PEO, merger and independence are all nested in our model, where PEO can arise in equilibrium and the endogenously determined level of PEO can benefit consumers and/or society. We identify conditions under which antitrust authorities would prohibit, partially permit, or permit PEO.

Keywords: Antitrust; knowledge transfer; oligopoly; partial equity ownership; strategic alliances; welfare. (search for similar items in EconPapers)
JEL-codes: L10 L40 L50 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2012-02
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Citations: View citations in EconPapers (4)

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Journal Article: Knowledge transfer and partial equity ownership (2017)
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