Common ownership and competition in product markets

Andrew Koch, Marios Panayides and Shawn Thomas ()

Journal of Financial Economics, 2021, vol. 139, issue 1, 109-137

Abstract: We investigate the relation between common institutional ownership of the firms in an industry and product market competition. We find that common ownership is neither robustly positively related with industry profitability or output prices nor is it robustly negatively related with measures of nonprice competition, as would be expected if common ownership reduces competition. This conclusion holds regardless of industry classification choice, common ownership measure, profitability measure, nonprice competition proxy, or model specification. Our point estimates are close to zero with tight bounds, rejecting even modestly sized economic effects. We conclude that antitrust restrictions seeking to limit intra-industry common ownership are not currently warranted.

Keywords: Common ownership; Governance; Competition; Horizontal merger (search for similar items in EconPapers)
JEL-codes: G34 L13 L41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:139:y:2021:i:1:p:109-137

DOI: 10.1016/j.jfineco.2020.07.007

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