The transitive reduction of a (finite) directed graph is a graph with the same vertex set and reachability relation and a minimum number of edges. However, what if vertex additions are allowed? In some cases, the addition of vertices can considerably reduce the number of edges required. For example, a complete bipartite digraph $K_{a,b}$ has $a + b$ veritices and $ab$ edges, but the addition of a single vertex in the middle results in a digraph with the same reachability relation that has $a + b + 1$ vertices and only $a + b$ edges.
More formally, given a directed graph $G = (V, E)$, the challenge is to find $G' = (V', E')$ and injective function $f: V \rightarrow V'$ such that $f(b)$ is reachable from $f(a)$ in $G'$ if and only if $b$ is reachable from $a$ in $G$ and such that $|E'|$ is minimized.
Are there any known results or algorithms related to this problem?