Disclosure of R&D Knowledge with Cross-Ownership in a Mixed Duopoly

This is the authors' abstract. We don't add key points for this paper.

This paper investigates the disclosure of R&D knowledge with cross-ownership in a mixed duopoly, where a semi-public ownership firm competes with a private firm. The results show that regardless of the degree of cross-ownership, both semi-public and private firms fully disclose their information. Furthermore, we find that privatization maintains the same disclosure level but reduces social welfare. Finally, we extend the model to unilateral ownership, the presence of foreign-owned firms and strategic R&D investment. We find that under unilateral shareholding, when the semi-public firm holds shares of the private firm, the semi-public firm fully discloses its R&D knowledge, while the private firm does not disclose its R&D knowledge. However, when the private firm holds shares of the semi-public firm, both semi-public and private firms fully disclose their information. The previous result still holds if the private firm is foreign-owned and strategic R&D investment is incorporated.