ABSTRACT We examine how cross‐ownership influences firms' endogenous R when sensitivity is high, this ranking may reverse. Increased cross‐ownership always dampens the outsider's R&D risk, while insiders' risk rises with cross‐holdings when spillovers are weak, but follows a U‐shaped pattern when spillovers are strong. Enabling R&D collaboration does not affect the outsider, but can reduce insiders' risk‐taking when spillovers are substantial. However, when spillovers are exogenous and independent of equity ties, insiders' risk increases monotonically with cross‐ownership. These results identify information‐sharing sensitivity as the key moderator of ownership networks' innovation risk‐taking, offering implications for competition and innovation policy.
Xing et al. (Wed,) studied this question.