Common Ownership, Competition, and Top Management Incentives
By Miguel Antón, Florian Ederer, M. Giné, Martin C. Schmalz. Journal of Political Economy, 2016
223 citations recorded by the source corpus.
We present a mechanism based on managerial incentives through which common ownership affects product market outcomes. Firm-level variation in common ownership causes variation in managerial incentives and productivity across firms, which leads to intraindustry and intrafirm cross-market variation in prices, output, markups, and market shares that is consistent with empirical evidence. The organizational structure of multiproduct firms and the passivity of common owners determine whether higher prices under common ownership result from higher costs or from higher markups. Using panel regressions and a difference-in-differences design, we document that managerial incentives are less performance sensitive in firms with more common ownership.
View Paper: https://www.semanticscholar.org/paper/b7ff09bcd2571f2e2b14328b2bf62a4118b2fe25
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Citations in the corpus
- Institutional Investors and Corporate Governance: The Incentive to Be Engaged (2018, background): “A controversial strand of the literature argues that institutions with widespread holdings may promote anticompetitive firm behavior, either by shaping managerial incentives or advocating less aggressive corporate policies (Anton et al. 2016; Azar, Raina, and Schmalz 2017; Panayides and Thomas 2017;”