Co-opetition and Disruption With Public Ownership

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See all articles by Arnoud W. A. Boot

Arnoud W. A. Boot

University of Amsterdam - Amsterdam Business School; Centre for Economic Policy Research (CEPR); Tinbergen Institute

Vladimir Vladimirov

University of Amsterdam Business School; Centre for Economic Policy Research (CEPR)

Date Written: January 4, 2021

Abstract

Do mandatory disclosure requirements make public firms less disruptive and competitive? Not necessarily. We offer a new perspective showing that mandatory disclosure facilitates "co-opetition" --- a strategy of competing on some dimensions while avoiding competition on others. Co-opetition encourages disruption by elevating profitability and lowering financing costs. The downside of co-opetition is that cannibalizing technologies on which firms cooperate is costlier, which may erode firms' commitment to disruption. This cost mainly affects intermediately-attractive investments and is outweighed by the benefits of co-opetition when rivals also pursue disruption. Our results explain evidence of higher profitability in disruptive public firms following stricter disclosure requirements.

Keywords: co-opetition, cooperation, competition, public firms, public ownership, disruption

JEL Classification: G31, G32, L41, O31

Suggested Citation

Boot, Arnoud W. A. and Vladimirov, Vladimir, Co-opetition and Disruption With Public Ownership (January 4, 2021). Available at SSRN: https://ssrn.com/abstract=

Arnoud W. A. Boot

University of Amsterdam - Amsterdam Business School ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+31 20 525 4162 (Phone)
+31 20 525 5318 (Fax)

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Vladimir Vladimirov (Contact Author)

University of Amsterdam Business School ( email )

Roetersstraat 18
Amsterdam, 1018WB
Netherlands

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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