Strategic Disclosure of Green R&D Knowledge Under Cross‐Ownership

ABSTRACT This paper develops a duopoly model to investigate the optimal disclosure strategy of green R&D knowledge under cross‐ownership. The results show that, compared to the case without cross‐ownership where both firms withhold green R&D knowledge, both firms fully disclose their green R&D knowledge under cross‐ownership. Furthermore, we also find that cross‐ownership can improve social welfare. In addition, we extend the model to examine the robustness of the basic model's conclusions. We find that in the case of unilateral shareholding, the firm holding shares in its competitor may be incentivized to disclose its green R&D knowledge, while the firm whose shares are held does not disclose its green R&D knowledge. In other extended scenarios, the conclusions regarding knowledge disclosure remain consistent with those of the basic model. However, whether cross‐ownership enhances social welfare depends on the level of shareholding and yields different conclusions across the various extended scenarios.