Common Ownership in America: 1980–2017

Matthew Backus, Christopher Conlon and Michael Sinkinson

American Economic Journal: Microeconomics, 2021, vol. 13, issue 3, 273-308

Abstract: We empirically assess the implications of the common ownership hypothesis from a historical perspective using the set of S&P 500 firms from 1980 to 2017. We show that the dramatic rise in common ownership in the time series is driven primarily by the rise of indexing and diversification and, in the cross section, by investor concentration, which the theory presumes to drive a wedge between cash flow rights and control. We also show that the theory predicts incentives for expropriation of undiversified shareholders via tunneling, even in the Berle and Means (1932) world of the widely held firm.

JEL-codes: D22 G32 G34 L21 L25 (search for similar items in EconPapers)
Date: 2021
References: View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Common Ownership in America: 1980-2017 (2019)
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DOI: 10.1257/mic.20190389

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