Horizontal Shareholding As An Antitrust Violation
By E. Elhauge. 2015
146 citations recorded by the source corpus.
Horizontal shareholdings exist when a common set of investors own significant shares in corporations that are horizontal competitors in a product market. Economic models show that such horizontal shareholdings are likely to anticompetitively raise prices when the owned businesses compete in a concentrated market. Recent empirical work not only confirms the prediction of these models, but also reveals that such horizontal shareholdings are omnipresent in our economy. I show that such horizontal shareholdings can help explain fundamental economic puzzles, including why corporate executives are rewarded for industry performance rather than just individual corporate performance, why corporations have not used recent high profits to expand output and employment, and why economic inequality has risen in recent decades. I also show that stock acquisitions that create such anticompetitive horizontal shareholdings are illegal under current antitrust law, and I recommend antitrust enforcement actions to undo them and their adverse economic effects
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/eca5009b41ed0b013c460cc493e0610242adeac3
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In Economics and Econometrics
Citations in the corpus
- Does common ownership really increase firm coordination? (2020, background): “Elhauge (2016) suggests using existing antitrust law to assess mergers, e.”
- Common-Ownership Concentration and Corporate Conduct (2018, background): “Elhauge (2016) offers the first assessment of the concrete legal implications of the empirical findings of anti-competitive effects of common ownership by Azar et al. (2018a) and Azar et al. (2016).”
- Anticompetitive Effects of Common Ownership (2018, background): “However, the implications of decreased competition such as increased inequality, slow macroeconomic growth and low real interest rates despite sustained and high profit margins are of much interest to policy makers and the population at large (Elhauge, 2015; Summers, 2016; Stiglitz, 2016).”