Common ownership and innovation efficiency

• 成果类型: Article
• 署名作者: Li, Xuelin; Liu, Tong; Taylor, Lucian A.
• 署名单位: University of South Carolina System; University of South Carolina Columbia; Massachusetts Institute of Technology (MIT); University of Pennsylvania
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2022.12.004
• 发表日期: 2023
• 页码: 475-497
• 关键词: COMMON OWNERSHIP; INNOVATION; venture capital; Healthcare

摘要

How does common ownership affect innovation? We study this question using project -level data on pharmaceutical startups and their venture capital (VC) investors. We find that common ownership leads VCs to hold back projects, withhold funding, and redirect inno-vation at lagging startups. Effects are stronger where R&D costs are larger, consistent with common owners aiming to cut duplicate costs. Effects are also stronger where techno-logical similarity is greater and preexisting competition is lower, consistent with common owners seeking market power for their surviving projects. Overall, common VC ownership appears to generate social benefits, via improved innovation efficiency, but also social costs. (c) 2022 Elsevier B.V. All rights reserved.