Common Ownership and Entrepreneurship

Ofer Eldar and Jillian Grennan

AEA Papers and Proceedings, 2021, vol. 111, 582-86

Abstract: We complement the literature on common ownership by presenting two new observations from entrepreneurial start-ups. First, given the increase in common ownership of start-ups by venture capital investors, inclusion of high-value start-ups in standard common ownership measures may actually increase aggregate measures of common ownership. Second, we suggest that even if public-firm common ownership leads to collusive inefficiency and higher prices in the short term, it may also create opportunities for entry of innovative high-growth start-ups. Consistent with this, we document that entrepreneurial activity and common ownership of start-ups tends to be higher in industries with higher common ownership among public firms.

JEL-codes: G24 G32 L26 M13 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1257/pandp.20211120

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