Common Ownership Concentration and Corporate Conduct

Martin Schmalz

No 12598, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The question of whether and how partial common-ownership links between strategically interacting firms affect firm behavior has been the subject of theoretical inquiry for decades. Since then, consolidation and increasing concentration in the asset-management industry has led to more pronounced common ownership concentration (CoOCo). Moreover, recent empirical research has provided evidence consistent with the literature's key predictions. The resulting antitrust concerns have received much attention from policy makers worldwide. However, the implications are more general: CoOCo affects the objective function of the firm, and therefore has implications for all subfields of economics studying corporate conduct -- including corporate governance, strategy, industrial organization, and all of 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)
JEL-codes: D21 D22 G10 G30 G32 G34 J41 K21 L10 L16 L21 L40 L41 L42 (search for similar items in EconPapers)
Date: 2018-01
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-com and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (73)

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