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Common Ownership, Competition, and Top Management Incentives

Miguel Antón (), Florian Ederer, Mireia Giné () and Martin Schmalz
Additional contact information
Miguel Antón: IESE Business School, Universidad de Navarra, http://www.iese.edu/es/claustro-investigacion/claustro/directorio-profesores/miguel-anton/
Mireia Giné: IESE Business School, Universidad de Navarra, http://www.iese.edu/en/faculty-research/professors/faculty-directory/mireia-gine/

No 2046R, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We show theoretically and empirically that managers have steeper financial incentives to expend effort and reduce costs when an industry’s firms tend to be controlled by shareholders with concentrated stakes in the firm, and relatively few holdings in competitors. A side effect of steep incentives is more aggressive competition. These findings inform a debate about the objective function of the firm.

Keywords: Common ownership; Competition; CEO pay; Management incentives; Governance (search for similar items in EconPapers)
JEL-codes: D21 G30 G32 J31 J41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-com, nep-hrm and nep-mic
Date: 2016-07, Revised 2017-10
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Related works:
Working Paper: Common Ownership, Competition, and Top Management Incentives (2018) Downloads
Working Paper: Common Ownership, Competition, and Top Management Incentives (2016) Downloads
Working Paper: Common Ownership, Competition, and Top Management Incentives (2016) Downloads
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