Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
Existing studies on the competitive effects of overlapping ownership usually take the products sold by the firms as given. This paper focuses on the firms’ incentive for product innovation in a vertically differentiated market. We find that overlapping ownership, while reducing the low-quality firm’s incentive to improve product quality, can raise the high-quality firm’s. The degree of vertical differentiation is higher, but consumer and social welfare may increase compared with the case of independent ownership.