Equity Holding, Technology Sharing and Supplier Investment

Guozhao Cao^1, and Kaili Song¹

¹School of Economics and Management, Shanxi Univesity, Taiyuan, China

Cite this paper:
Guozhao Cao and Kaili Song. Equity Holding, Technology Sharing and Supplier Investment. Journal of Finance and Economics. 2021; 9(2):73-76. doi: 10.12691/jfe-9-2-4

Abstract

Consider a supply chain consists of one supplier and two manufactures, we discuss the influence of manufacturer’s technology sharing on supplier’s technology investment decision, and the impact of equity holding on the first two by constructing a multi-stage game between a supplier and two manufacturers. The results show that when the investment cost is relatively high, the manufacturer will choose to open technology to induce supplier investment in open technology. Otherwise, it will choose to close technology to force the supplier investment in both technologies. We also find that when the spillover effect is small, the probability that the manufacturer choosing to open technology and the supplier investing in the open technology decreases first and then increases with the shareholding ratio.

Keywords:
supply chain equity holding technology sharing supplier investment

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