Common Ownership and Competition: Evidence from Ultimate Owners of Private and Public Firms

Inga Heiland

No 19662, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Firms under common ownership have incentives to internalize the consequences of their behavior on each other, potentially resulting in less competition. I exploit unique data from Norway to document the economy-wide extent of common ownership, covering private and public firms and the universe of shareholders. Using exogenous variation in common ownership at the firm-household level due to marriages among large individual shareholders, I provide causal evidence on the effect of common ownership on profit margins. I find that firms experiencing an increase in common ownership due to a marriage increase profit margins by 7 to 16 percentage points, compared to firms that are affected by similar marriages but do not experience a change in common ownership.

Keywords: Common ownership; Private firms; Corporate governance (search for similar items in EconPapers)
JEL-codes: G32 L22 L26 (search for similar items in EconPapers)
Date: 2024-11
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