Common Ownership of Competing Firms: Evidence from Australia

Andrew Leigh and Adam Triggs

No 9018, CESifo Working Paper Series from CESifo

Abstract: We provide the first estimates of the extent of common ownership of competing firms in Australia. Combining data on market shares and substantial shareholdings, we calculate the impact of common ownership on effective market concentration. Among firms where we can identify at least one owner, 31 percent share a substantial owner with a rival company. Analysing 443 industries, we identify 49 that exhibit common ownership, including commercial banking, explosives manufacturing, fuel retailing, insurance and iron ore mining. Across the Australian economy, common ownership increases effective market concentration by 21 percent. Our estimates imply that if listed firms seek to maximise the value of their investors’ portfolios, then they place the same value on $3.70 of their competitors’ profits as on $1 of their own profits. We discuss the limitations of the available data, and the potential implications of common ownership for competition in Australia.

Keywords: horizontal shareholding; market concentration; Herfindahl-Hirschman Index; Modified Herfindahl-Hirschman Index; antitrust; competition (search for similar items in EconPapers)
JEL-codes: D42 D43 L11 L12 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-bec, nep-com and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp9018.pdf (application/pdf)

Related works:
Journal Article: Common Ownership of Competing Firms: Evidence from Australia (2021)
Working Paper: Common Ownership of Competing Firms: Evidence from Australia (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9018

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().