{"title":"Cross‐ownership, business dynamism, and wage inequality in general equilibrium","authors":"H. Beladi, Chi‐Chur Chao, Kuo‐Hsuan Chin","doi":"10.1111/sjpe.12380","DOIUrl":null,"url":null,"abstract":"This study examines the distributive and welfare effects of cross‐ownership by firms in a general equilibrium economy on the product and factor markets. The cross‐ownership of equities, such as collusion, tends to be anticompetitive, thereby narrowing the wage gap between skilled and unskilled labor in the short term with the existing number of firms. In the capital market, reducing capital cost through cross‐ownership causes new firms to enter the market in the long term. This firm‐entry effect induced by cross‐ownership through an increase in the number of competitors generates a competitive force that exacerbates wage inequality and reduces welfare in the economy.","PeriodicalId":47171,"journal":{"name":"Scottish Journal of Political Economy","volume":null,"pages":null},"PeriodicalIF":0.9000,"publicationDate":"2024-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Scottish Journal of Political Economy","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1111/sjpe.12380","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This study examines the distributive and welfare effects of cross‐ownership by firms in a general equilibrium economy on the product and factor markets. The cross‐ownership of equities, such as collusion, tends to be anticompetitive, thereby narrowing the wage gap between skilled and unskilled labor in the short term with the existing number of firms. In the capital market, reducing capital cost through cross‐ownership causes new firms to enter the market in the long term. This firm‐entry effect induced by cross‐ownership through an increase in the number of competitors generates a competitive force that exacerbates wage inequality and reduces welfare in the economy.
期刊介绍:
The Scottish Journal of Political Economy is a generalist journal with an explicitly international reach in both readership and authorship. It is dedicated to publishing the highest quality research in any field of economics, without prejudice to the methodology or to the analytical techniques used. The editors encourage submissions in all fields of economics in order to provide practical contributions to the literature, and to further the influence of economics in the world of practical affairs.