Common Ownership in America: 1980–2017

By Matt Backus, Christopher T. Conlon, Michael Sinkinson. American Economic Journal: Microeconomics, 2019

190 citations recorded by the source corpus.

We empirically assess the implications of the common ownership hypothesis from a historical perspective using the set of S&P 500 firms from 1980 to 2017. We show that the dramatic rise in common ownership in the time series is driven primarily by the rise of indexing and diversification and, in the cross section, by investor concentration, which the theory presumes to drive a wedge between cash flow rights and control. We also show that the theory predicts incentives for expropriation of undiversified shareholders via tunneling, even in the Berle and Means (1932) world of the widely held firm. (JEL D22, G32, G34, L21, L25)

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/0172143f667cf4039e51793fecf890f9589404b2

Citations in the corpus

• Common Ownership, Competition, and Top Management Incentives (2016, unknown): “Following previous literature and specifically Backus et al. (2021b), we assume proportional control—that is, gio 5 bio as a baseline.19 The discussion on proportional control is important in the aggregation of shareholder preferences at the firm-pair level.”