Anticompetitive effects of common ownership

Schmalz, Martin C., Azar, Jose and Tecu, Isabel (2018) Anticompetitive effects of common ownership. Journal of Finance, 73 (4). pp. 1513-1565.

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Abstract

Many natural competitors are jointly held by a small set of large institutional investors. In the US airline industry, taking common ownership into account implies increases in market concentration that are 10 times larger than what is “presumed likely to enhance market power” by antitrust authorities. Within-route changes in common ownership robustly correlate with route-level changes in ticket prices, even when we only use variation in ownership due to the combination of two large asset managers. We conclude that a hidden social cost – reduced product market competition – accompanies the private benefits of diversification and good governance.

Item Type: Article
Keywords: Competition, Ownership, Diversification, Pricing, Antitrust, Governance, Product Market, Finance
Subject(s): Finance
Date Deposited: 13 Dec 2018 15:55
Last Modified: 13 Dec 2018 15:55
Funders: n/a
URI: http://eureka.sbs.ox.ac.uk/id/eprint/7200

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