Cross-ownership, R&D Spillovers, and Antitrust Policy

Ángel L. López and Xavier Vives
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Ángel L. López: Universitat Autónoma de Barcelona, Postal: Plaza Cívica, s/n, 08193 Bellaterra, Barcelona, http://www.uab.cat/

No D/1140, IESE Research Papers from IESE Business School

Abstract: This paper considers cost-reducing R&D investment with spillovers in a Cournot oligopoly with minority shareholdings. We fi…nd that, with high market concentration and sufficiently convex demand, there is no scope for cross-ownership to improve welfare regardless of spillover levels. Otherwise, there is scope for cross-ownership provided that spillovers are sufficiently large. The socially optimal degree of cross-ownership increases with the number of …firms, with the elasticity of demand and of the innovation function, and with the extent of spillover effects. In terms of consumer surplus standard, the scope for cross-ownership is greatly reduced even under low market concentration.

Keywords: competition policy; partial merger; collusion; innovation; minority shareholdings (search for similar items in EconPapers)
JEL-codes: D43 L13 O32 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2016-05-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:ebg:iesewp:d-1140

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