Cross and Common Ownership of Firms and Their Effect on Competition and Innovation

The purpose of this SEEK Project is to investigate the effects of cross ownership of firms (by other firms) and common ownership of firms (by third-party investors; for instance, private equity firms or other institutional investors) on firms’ strategies in the product market and the technology space. More specifically, we ask how cross and common ownership affect firms’ price and non-price strategies and show how such ownership structures change market outcomes through their effects on markups and innovation.

Since cross and common ownership usually take the form of minority shareholdings, this empirically prevalent phenomenon is not covered by merger control. Most of the existing work has been of theoretical nature, and conclusive empirical evidence (on general effects, and the difference of cross and common ownership more specifically) is still lacking, especially for the European market. This project aims to fill this gap.

Duration: May 2019 – December 2020

Internal members, ZEW – Leibniz Centre for European Economic Research, Mannheim:

• Dr. Niklas Dürr, ZEW Research Department “Economics of Innovation and Industrial Dynamics”
• Dr. Bernhard Ganglmair, ZEW Research Department “Economics of Innovation and Industrial Dynamics”
• Michael Hellwig, ZEW Research Department “Economics of Innovation and Industrial Dynamics”

External members: 

• Assistant Prof. Dr. Sven Heim, MINES Paris Tech (France)
• Prof. Dr. Armin Schmutzler, University of Zurich (Switzerland)