Open AccessPosted Content
Vertical Integration and Disruptive Cross-Market R&D
Ping Lin,Tianle Zhang,Wen Zhou +2 more
TLDR
In this article, the Arrow's replacement effect is also present in the vertical setting, which gives rise to two general results: vertical integration lowers the RD and vertical integration raises the R&D incentive of the non-integrated downstream firm.Abstract:
We study incentives for innovations that enable firms to enter backward into the input market. Such innovations are disruptive in that they lead to structural changes and even reversal of supply-customer relationships. We first show that Arrow's replacement effect is also present in our vertical setting which gives rise to two general results: (1) vertical integration lowers the RD and (2) vertical integration raises the R&D incentive of the non-integrated downstream firm. We then identify, respectively, situations for strategic integration, which is driven by the motive to preempt R&D of the target firm, and for strategic separation, which occurs as a means to not trigger R&D by the downstream rival. An otherwise profitable raising rival's cost strategy may not be chosen for fear of counterattack by the rival in the form of disruptive R&D.read more
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Vertical or horizontal: optimal integration strategy under separation of ownership and control
TL;DR: Zhang et al. as discussed by the authors proposed a framework to analyze the strategic value of integration, when separation of ownership and control is considered, and investigated the optimal integration strategy in different control distribution and discussed how external market influences the best strategic choice.
Journal ArticleDOI
Industry consolidation as a strategy: an acquisition program perspective
Jarno Lähteenmäki,Juuso Töyli +1 more
TL;DR: In this paper , the authors focus on pre-acquisition strategizing of acquisition programs and propose a model in which an acquiring company could manage its acquisitions for industry asset consolidation over the industry evolution.
References
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Book ChapterDOI
Economic Welfare and the Allocation of Resources for Invention
TL;DR: In this article, the determination of optimal resource allocation for invention will depend on the technological characteristics of the invention process and the nature of the market for knowledge, which is interpreted broadly as the production of knowledge.
Journal ArticleDOI
Capitalism, socialism and democracy
TL;DR: In this article, the authors argue that the conflict between capitalism and socialism is not necessarily in competition or conflict with each other, at least not conceptually (whether they could in practice coexist with one another is a different and empirical question).
Posted Content
Preemptive Patenting and the Persistence of Monopoly
TL;DR: In this article, the authors investigate whether institutions such as the patent system create opportunities for firms with monopoly power to maintain their monopoly power by taking preemptive actions, such as brand identification, spatial location, and capacity expansion.
Journal ArticleDOI
Vertical integration and market foreclosure
Oliver Hart,Jean Tirole +1 more
TL;DR: In this article, the MIT Energy Lab, the Guggenheim Foundation, the Olin Foundation, National Science Foundation, and the Taussig Visiting Professorship at Harvard and the Marvin Bower Fellowship at the Harvard Business School.