Supply chain innovations and partial ownership

Matthias Hunold, Shiva Shekhar

We show that competing downstream firms may rather invest in their inefficient inhouse production than help improve the technology of the efficient supplier, even if this is costless. Even worse, a downstream firm can have strong incentives to decrease the efficiency of the supplier in order to improve its outside options. We demonstrate that non-controlling partial backward ownership can align the incentives of the supplier and its customers with respect to supply chain innovations.

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Year of publication:	February 2018
Authors:	Hunold, Matthias ; Shekhar, Shiva
Publisher:	Düsseldorf, Germany : düsseldorf university press
Subject:	knowledge spillover \| innovation \| minority shareholdings \| supply chain efficiency \| vertical partial ownership \| Lieferkette \| Supply chain \| Innovation \| Eigentümerstruktur \| Ownership structure \| Wissenstransfer \| Knowledge transfer \| Kapitalbeteiligung \| Equity participation \| Vertikale Integration \| Vertical integration \| Corporate Governance \| Corporate governance \| Theorie \| Theory \| Rentabilität \| Profitability