Downstream Cross‐Holdings and Upstream R&D*
研究下游企业交叉持股如何影响上游企业的成本降低研发投资，发现交叉持股会削弱下游竞争并减少上游投资，但在投资效率低下时能提升下游利润和总剩余。
Cross‐holdings affect firms’ behavior in other vertically related markets. We consider a vertical market with two downstream firms and an upstream firm engaging in cost‐reducing R&D. Since downstream cross‐holdings weaken downstream competition, the upstream firm also decreases its investment. Hence, we find that as the degree of downstream cross‐holdings increases, input price increases and investment level decreases. Although cross‐holdings have this negative effect on downstream firms’ profits, they increase the downstream firms’ profits if the investment technology is inefficient. Finally, we show that with inefficient upstream investment, total surplus increases with cross‐holdings, while consumer surplus always decreases with cross‐holdings.