Antitrust Policies and Corporate Innovation

61 Pages Posted: 19 Mar 2020 Last revised: 1 Mar 2023

See all articles by Ross Levine

Ross Levine

Stanford University; National Bureau of Economic Research (NBER)

Chen Lin

The University of Hong Kong - Faculty of Business and Economics

Lai Wei

Lingnan University - Department of Finance and Insurance

Wensi Xie

The Chinese University of Hong Kong (CUHK) - CUHK Business School

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Date Written: March 16, 2020

Abstract

We evaluate the impact of antitrust laws on corporate innovation while differentiating by firm financing constraints and ownership structure. Intensifying competition laws boosts the number, impact, and explorative nature of patents. The effects are weaker among (a) more financial-constrained firms given the costs of innovation and (b) family-controlled firms as families have large proportions of their wealth concentrated in their firms, impeding risky investments. Consistent results emerge using our two, newly assembled datasets: a firm-level dataset of about 1 million observations across 66 countries starting in 1991 and a long-panel, country-industry dataset covering 186 countries starting in 1888.

Keywords: Innovation, Antitrust Law, Corporate Finance, Capital and Ownership Structure

JEL Classification: O31; K21; G32, L4

Suggested Citation

Levine, Ross and Lin, Chen and Wei, Lai and Xie, Wensi, Antitrust Policies and Corporate Innovation (March 16, 2020). Available at SSRN: https://ssrn.com/abstract=3555172 or http://dx.doi.org/10.2139/ssrn.3555172

Ross Levine (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Chen Lin

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Lai Wei

Lingnan University - Department of Finance and Insurance ( email )

8 Castle Peak Road
Lingnan University
Hong Kong, New Territories
China

Wensi Xie

The Chinese University of Hong Kong (CUHK) - CUHK Business School ( email )

Cheng Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
Hong Kong

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