Cross ownership and divestment incentives

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Stenbacka , R & Van Moer , G 2021 , ' Cross ownership and divestment incentives ' , Economics Letters , vol. 201 , 109748 . https://doi.org/10.1016/j.econlet.2021.109748

Title: Cross ownership and divestment incentives
Author: Stenbacka, Rune; Van Moer, Geert
Contributor: Hanken School of Economics, Economics, Helsinki
Hanken School of Economics, Economics, Helsinki
Belongs to series: Economics Letters
ISSN: 0165-1765
Abstract: Even though cross ownership raises industry profits, we demonstrate that it is prone to a commitment problem. Specifically, we show that producers in a Cournot duopoly have unilateral incentives to resell their minority share-holdings in the rival to outside investors, leading to an equilibrium with complete divestments. This feature challenges the stability of cross ownership configurations.
Date: 2021-02-12
Subject: 511 Economics
Cross ownership
Divestment incentives
KOTA2021?
PREM2021_04
2 - Hybrid open access publication channel
1 - Self archived
https://helda.helsinki.fi/dhanken/handle/10227/409401
0- Ingen av författarna har en utländsk affiliation
1- Publicerad utomlands
0- Ingen affiliation med ett företag
AoS: Competition economics and service strategy - Quantitative consumer behaviour and competition economics
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