The impact on market outcomes of the portfolio selection of large equity investors

Diego Moreno () and Emmanuel Petrakis

Economics Letters, 2022, vol. 212, issue C

Abstract: We study the portfolio selection of large investors who own equity of the firms competing in a symmetric oligopoly. An investor’s objective is to maximize the value of its portfolio accounting for the impact of its interests on the managerial incentives. We show that in a stationary equilibrium the portfolios of large investors soften competition, increasing the price markup and profits.

Keywords: Market power; Common ownership; Minority equity; Portfolio selection (search for similar items in EconPapers)
JEL-codes: L13 L2 L4 L5 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (7)

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Working Paper: The impact on market outcomes of the portfolio selection of large equity investors (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:212:y:2022:i:c:s0165176522000143

DOI: 10.1016/j.econlet.2022.110296

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