How Mixed Ownership Affects Decision Making in Turbulent Times: Evidence From the Digital Revolution in Telecommunications

57 Pages Posted: 3 Feb 2020

See all articles by David Wehrheim

David Wehrheim

IESE Business School

Hakki Dogan Dalay

University of Zurich; Bocconi University - Department of Management and Technology

Andrea Fosfuri

Bocconi University - Department of Management and Technology

Christian Helmers

Santa Clara University - Leavey School of Business; Universidad Carlos III de Madrid

Date Written: January 11, 2020

Abstract

This study examines how the ownership structure of corporations shapes their responses to technological change. We predict that mixed ownership, a situation in which, following privatization, the shares of a company are partly privately held and partly held by the government, is associated with lower responsiveness to technological change. We theorize that the top management of corporations with mixed ownership is exposed to conflicting views regarding how companies should address the challenges posed by technological change, thereby making them more likely to maintain the status quo. In addition, we argue that mixed ownership is particularly problematic when firms attempt to integrate extramural technology to manage technological transformation. Our data on European telecommunications operators that had to adapt to the advent of Internet-based communication services support our predictions.

Keywords: ownership structure, mixed ownership, privatization, digitization, innovation, telecommunications industry

JEL Classification: G32, G38, L33, L96, O31, O33

Suggested Citation

Wehrheim, David and Dalay, Hakki Dogan and Fosfuri, Andrea and Helmers, Christian, How Mixed Ownership Affects Decision Making in Turbulent Times: Evidence From the Digital Revolution in Telecommunications (January 11, 2020). Available at SSRN: https://ssrn.com/abstract=3517715 or http://dx.doi.org/10.2139/ssrn.3517715

David Wehrheim (Contact Author)

IESE Business School ( email )

Camino Cerro del Águila, 3
Madrid, Madrid 28023
Spain

Hakki Dogan Dalay

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Andrea Fosfuri

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Christian Helmers

Santa Clara University - Leavey School of Business ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States

Universidad Carlos III de Madrid ( email )

CL. de Madrid 126
Madrid, Madrid 28903
Spain

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