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Title: Technological Progress and Ownership Structure

Author(s): Heng Geng, Harald Hau and Sandy Lai

Publication Date: January 2016

Keyword(s): hold-up problems, innovation, institutional ownership and patents

Programme Area(s): Financial Economics, Industrial Organization and Macroeconomics and Growth

Abstract: Innovation processes under patent protection generate hold-up problems if complementary patents are owned by different firms. We show that in line with Hart and Moore (1990), shareholder ownership overlap across firms with patent complementarities helps mitigate such hold-up problems and correlates significantly with higher patent investment and more patent success as measured by future citations. The positive innovation effect is strongest for concentrated overlapping ownership and for the cases when the overlapping shareholders are dedicated investors.

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Bibliographic Reference

Geng, H, Hau, H and Lai, S. 2016. 'Technological Progress and Ownership Structure'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=11064