Testing the Theory of Common Stock Ownership

Boller, Lysle; Morton, Fiona Scott

doi:10.3386/w27515

Cited by 33 publications

(7 citation statements)

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“…Gutiérrez and Philippon (2017b) suggested that the increase in index and quasi‐index fund ownership has played a role in the decline of aggregate investment 16 Summers. (2016) and Stiglitz (2017) linked increases in market power to the potential secular stagnation of developed economies, and Boller and Morton (2020) used an event study of inclusion in the S&P 500 index to conclude that common ownership increases profits.…”

Section: Connections With the Literaturementioning

confidence: 99%

“…Backus, Conlon, and Sinkinson (2018) adopted a structural approach in their study of the cereal industry and found large potential (but not actual) implied effects of common ownership relative to mergers. power to the potential secular stagnation of developed economies, and Boller and Morton (2020) used an event study of inclusion in the S&P 500 index to conclude that common ownership increases profits.…”

Section: Empiricsmentioning

confidence: 99%

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General Equilibrium Oligopoly and Ownership Structure

Azar

Vives

2021

ECTA

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We develop a tractable general equilibrium framework in which firms are large and have market power with respect to both products and labor, and in which a firm's decisions are affected by its ownership structure. We characterize the Cournot–Walras equilibrium of an economy where each firm maximizes a share‐weighted average of shareholder utilities—rendering the equilibrium independent of price normalization. In a one‐sector economy, if returns to scale are non‐increasing, then an increase in “effective” market concentration (which accounts for common ownership) leads to declines in employment, real wages, and the labor share. Yet when there are multiple sectors, due to an intersectoral pecuniary externality, an increase in common ownership could stimulate the economy when the elasticity of labor supply is high relative to the elasticity of substitution in product markets. We characterize for which ownership structures the monopolistically competitive limit or an oligopolistic one is attained as the number of sectors in the economy increases. When firms have heterogeneous constant returns to scale technologies, we find that an increase in common ownership leads to markets that are more concentrated.

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Section: Connections With the Literaturementioning

confidence: 99%

Section: Empiricsmentioning

confidence: 99%

General Equilibrium Oligopoly and Ownership Structure

Azar

Vives

2021

ECTA

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“…The literature assessing the competitive effects of common ownership of product market competitors by financial funds is growing rapidly (Boller and Scott-Morton 2020;Azar et al 2018Azar et al , 2019Backus et al 2018;Backus et al 2019;Gerakos and Xie 2019;Newham et al 2018). If the empirical evidence continues to accumulate in a way that raises competitive concerns, the analysis of acquisitions of stock will require greater attention from the agencies.…”

Section: Include Discussion Of Common Ownership By Financial Fundsmentioning

confidence: 99%

The 2010 HMGs Ten Years Later: Where Do We Go From Here?

Salop

Morton

2021

Rev Ind Organ

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“…Interestingly, funds from smaller families are more likely to invest into firms with market power. A possible interpretation of this relation is that smaller fund families will find it more difficult to engage in corporate governance and coordinative actions when investing in same-industry and competing firms and, therefore, might have a preference for firms with less competitors (e.g., Boller and Scott Morton, 2020).…”

Section: Determinants Of Mpbmentioning

confidence: 99%

Mutual Fund Bets on Market Power

Jaspersen

2021

SSRN Journal

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Testing the Theory of Common Stock Ownership

Cited by 33 publications

References 0 publications

General Equilibrium Oligopoly and Ownership Structure

General Equilibrium Oligopoly and Ownership Structure

The 2010 HMGs Ten Years Later: Where Do We Go From Here?

Mutual Fund Bets on Market Power

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