Browsing by Author "Ruivo, Pedro Vilas"
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- Backward partial cross-ownership and upstream R&DPublication . Ruivo, Pedro Vilas; Brito , DuarteIn this article, we investigate the welfare effects of vertical backward ownership in vertical markets with upstream cost-reducing RD investments, emphasizing the role of input price discrimination. We first examine how backward partial cross- ownerships among firms influences welfare outcomes under uniform input pricing and input price discrimination. Under uniform input pricing, we replicate the in- variance result of Greenlee and Raskovich (2006) but demonstrate that this in- variance disappears when investment is incorporated. In this case, vertical partial cross-ownerships consistently enhance welfare. Under input price discrimination, the results are more nuanced: increasing cross ownership may either improve or reduce welfare. Finally, we take the ownership structure as given and study the welfare effects of input price discrimination. We find that transitioning from uniform input pricing to input price discrimination can have both positive and negative welfare implications, depending on specific parameter configurations.