Common-Ownership Concentration and Corporate Conduct

Martin Schmalz

No 6908, CESifo Working Paper Series from CESifo

Abstract: The question of whether and how partial common-ownership links between strategically interacting firms affect firm objectives and behavior has been the subject of theoretical inquiry for decades. Since then, the growth of intermediated asset management and consolidation in the asset-management sector has led to more pronounced common ownership links at the beneficial-owner level. Recent empirical research has provided evidence consistent with the literature’s prediction that common ownership concentration (CoOCo) can affect product market outcomes. The resulting antitrust concerns have received worldwide attention. However, because CoOCo can change the objective function of the firm, the potential implications span all fields of economics that involve corporate conduct, including corporate governance, strategy, industrial organization, and financial economics. This article connects the papers establishing the theoretical foundations, reviews the empirical and legal literatures, and discusses challenges and opportunities for future research.

Keywords: ownership; control; network; industry concentration; antitrust; objective of the firm; shareholder unanimity (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-bec and nep-com
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Citations: View citations in EconPapers (73)

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Working Paper: Common Ownership Concentration and Corporate Conduct (2018)
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