Who Is Afraid of BlackRock?

Connected stocks

Massimo Massa, David Schumacher and Yan Wang

The Review of Financial Studies, 2021, vol. 34, issue 4, 1987-2044

Abstract: We exploit the merger between BlackRock and Barclays Global Investors to study how changes in expected ownership concentration affect the investment behavior of funds and the cross-section of stocks worldwide. We find that funds with open-end structures and large exposure to commonly held stocks begin avoiding these stocks following the merger announcement. This leads to a permanent change in the composition of institutional ownership and a negative price and liquidity impact. We confirm these results in a large sample of global asset management mergers. Our findings suggest that market participants behave strategically in response to changes in expected financial fragility.

JEL-codes: G11 G12 G14 G15 G23 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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