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Corporate governance, product innovation, and competition
Author(s) -
Stenbacka Rune
Publication year - 2022
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/boer.12332
Subject(s) - corporate governance , shareholder , industrial organization , competition (biology) , stakeholder , shareholder value , business , product (mathematics) , maximization , microeconomics , value (mathematics) , duopoly , economics , finance , management , ecology , geometry , mathematics , machine learning , cournot competition , computer science , biology
We show that duopolistic innovation competition between identical firms may lead to an equilibrium with asymmetric corporate governance modes with one firm being shareholder oriented and its rival stakeholder oriented. This happens if the benefit associated with innovation success faced by the stakeholders falls short of an endogenously determined threshold. Above this threshold, the corporate governance equilibrium is symmetric with both firms oriented toward maximization of shareholder value.