Common-Ownership Concentration and Corporate Conduct
By Martin C. Schmalz. Annual Review of Financial Economics, 2018
197 citations recorded by the source corpus.
The question of whether and how partial common-ownership links between strategically interacting firms affect firm objectives and behavior has been the subject of theoretical inquiry for decades. Since then, the growth of intermediated asset management and consolidation in the asset management sector has led to more pronounced common-ownership links at the level at which corporate control is exercised. Recent empirical research has provided evidence consistent with the literature's prediction that common-ownership concentration (CoOCo) can affect product market outcomes. The resulting antitrust concerns have received worldwide attention. However, because CoOCo can change the objective function of a firm, the potential implications span all fields of economics that involve corporate conduct, including corporate governance, strategy, industrial organization, and financial economics. This article connects the papers establishing the theoretical foundations, reviews the empirical and legal literatures, and discusses challenges and opportunities for future research.
Subfields: Accounting, Economics and Econometrics, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/0d867a5dde8b8f6abac9c7b84159de19ea24a0e9
Citations in the corpus
- Ultimate ownership and bank competition (2016, unknown): “Antón, Ederer, Giné and Schmalz (2018) show that managers’ incentives are at least partially aligned with their shareholders anticompetitive interests as top executives get paid less for the own firm’s performance when the firm is owned predominantly by investors that also hold large stakes in…”
- Common ownership and competition in product markets (2021, unknown): “Antón, Ederer, Giné, and Schmalz (2018) finds that greater common ownership in an industry is more frequently accompanied by CEO compensation contracts that place less weight on own-firm performance and more weight on rival-firm performance, consistent with common owners incentivizing CEOs to…”
- Overlapping Ownership, R&D Spillovers, and Antitrust Policy (2019, unknown): “See Schmalz (2018) for a survey of the e⁄ects of common ownership and their theoretical, empirical and policy underpinnings.”