Lubricating Role of Supply Chain Vertical Common Ownership in the Breakthrough of Key Core Technology: Evidence and Policy Implications From China

ABSTRACT This study explores whether and how vertical common ownership along the supply chain plays a lubricating role in key core technology breakthroughs. Using a dataset of Chinese listed companies from 2007 to 2023, we find that vertical common institutional ownership significantly promotes the breakthrough of key core technology. We also clarify that vertical common ownership exerts the lubricating effect by improving patent mutual citations along the supply chain and reducing firmsʼ asset occupancy. This lubricating effect is stronger for non‐state‐owned firms as well as firms characterised by limited knowledge breadth and high asset specificity. Our findings provide valuable insights into understanding the importance of supply chain common institutional investors in promoting national strategic innovation capabilities.