Innovation: The Bright Side of Common Ownership?

Antón, Miguel; Ederer, Florian; Giné, Mireia; Schmalz, Martin C.

doi:10.2139/ssrn.3099578

Cited by 30 publications

(19 citation statements)

References 62 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The presence of (large) institutions all holding shares in each company within the same industry, while raising concerns from an antitrust perspective (Azar et al 2018, Elhauge 2015, Posner et al 2017, may have a pro-innovation effect, given that the positive externalities and spillovers from each firm's R&D investment will benefit all portfolio companies of diversified investors. Recent empirical work provides some evidence confirming that common ownership of firms is indeed associated with greater innovation (Anton et al 2018) and technological diffusion (Geng et al 2016, Kostovetsky & Manconi 2018. However, these findings are controversial.…”

Section: Concentrated Institutional Investmentmentioning

confidence: 97%

Putting technology to good use for society: the role of corporate, competition and tax law

Armour¹,

Enriques²,

Ezrachi³

et al. 2018

JBA

View full text Add to dashboard Cite

Innovation and its main output, technology, are changing the way we work, socialise, vote, and live. New technologies have improved our lives and made firms more productive, overall raising living standards across the world. Thanks to progress in information technology, the rate of change is accelerating. Disruption and disequilibrium are the new normal. In this essay, prepared as a chapter for the first phase of the British Academy 'The Future of the Corporation' initiative, we reflect upon the role that corporate, competition, and tax law can play both to facilitate innovation and simultaneously assuage emergent societal risks arising from new technologies. We consider means of enhancing investment in research and development ('R&D') and optimising corporate organisation. But we also reflect on the risks associated with innovation, such as the use of technology to exploit consumers, manipulate markets, or distort, unwittingly or not, the political process. Finally, we consider the way in which the environment for business law reform is subject to new political risks following the challenge to the liberal order from populism and the rising power of dominant technology companies.

show abstract

Section: Concentrated Institutional Investmentmentioning

confidence: 97%

Putting technology to good use for society: the role of corporate, competition and tax law

Armour¹,

Enriques²,

Ezrachi³

et al. 2018

JBA

View full text Add to dashboard Cite

show abstract

“…My paper examines the impact on corporate innovation of a new form of ownership structure, common ownership, and tests feedback between suppliers and customers as a potential channel. The work is most closely related to Anton et al (2018)'s work. They theoretically analyze the impact of horizontal common ownership on corporate innovation.…”

Section: Hold-up Problemmentioning

confidence: 99%

“…The magnitude of vertical common ownership's impact on input to innovation is consistently larger than that of horizontal common ownership. The reason might be that there are two countervailing effects of horizontal common ownership on corporate innovation: a positive effect from technology spillovers and a negative business-stealing effect from competitors (Bloom et al, 2013;Anton et al, 2018). In contrast, the impact of vertical common ownership on corporate innovation has two positive effects: a positive technology-spillover effect, and a positive effect from hold-up mitigation along the supply chain.…”

Section: Vertical Vs Horizontal Common Ownershipmentioning

confidence: 99%

Common Ownership along the Supply Chain and Supplier Innovations

Chen

2020

SSRN Journal

View full text Add to dashboard Cite

Common owners are the (institutional) investors that hold equities of multiple firms. I examine the impact of common ownership of suppliers and customers on suppliers' innovation activities. I find suppliers' investment in innovation, quantity and quality of innovation output increase when common owners control higher fractions of their and their customers' shares outstanding. The impact of this vertical common ownership on innovation input and quality of innovation output is stronger and more robust than that of the horizontal common ownership. I provide plausible evidence for causality using both a difference-in-differences approach and an instrument variable approach based on a quasi-natural experiment in the form of financial institution mergers and acquisitions. Moreover, I test the potential channels through which the vertical common ownership could influence supplier innovation. My evidence suggests that common ownership increases suppliers' investment in innovation by mitigating hold-up issues between suppliers and customers, and enhances suppliers' innovation output performance by improving technological spillovers between suppliers and customers.However, my results also suggest that for suppliers producing mainly capital goods, these positive effects of common ownership on innovation are offset by a negative effect due to vertical creative destruction. Overall, my evidence suggests that common institutional ownership enhances suppliers' innovation performance by improving relationships between suppliers and their customers.

show abstract

“…indexing) of institutions, therefore the negative effect should dominate. An incomplete paper by Anton et al (2018) argues that the effect of common ownership on corporate innovation revolves around the interaction between technological spillovers and product market spillovers. Although they only show correlation evidence but not a causal link, their finding that the effect could vary from industry to industry does not contradict with the overall negative effect we observe.…”

Section: Introductionmentioning

confidence: 99%

Corporate innovation in a world of common ownership

Chiao

Qiu

Wang

2020

View full text Add to dashboard Cite

PurposeThe purpose of this paper is to examine the impact of common ownership on corporate innovation, including innovation input, innovation output and postgrant patents.Design/methodology/approachThis paper uses the ordinary least square model and the difference-in-differences technique to evaluate the effect of institutional interlocking shareholdings on the life cycle of corporate innovation.FindingsThe results show that common ownership impedes innovation measured by patent grants and citations through reduced R&D expenditures. However, common ownership protects postgrant patents by lowering the likelihood that a co-owned firm gets involved in patent litigation and by accelerating the settlement of lawsuits between co-owned firms.Practical implicationsFrom a regulatory perspective, common ownership in younger firms that rely heavily on R&D investment to produce innovation outputs is detrimental and needs to be regulated. However, common ownership in mature firms, which hold a big pool of patents or rely on acquiring patents to compete, is of less concern because of the protective role detected.Originality/valueThe paper provides a first comprehensive look into how same-industry common ownership affects innovation input, innovation output and postgrant patents. The research also reconciles the anticompetitive effect and the coordinative effect of common ownership documented in the literature.

show abstract

Innovation: The Bright Side of Common Ownership?

Cited by 30 publications

References 62 publications

Putting technology to good use for society: the role of corporate, competition and tax law

Putting technology to good use for society: the role of corporate, competition and tax law

Common Ownership along the Supply Chain and Supplier Innovations

Corporate innovation in a world of common ownership

Contact Info

Product

Resources

About