Does common ownership really increase firm coordination?

A growing number of studies suggest that common ownership caused cooperation among firms to increase and competition to decrease. We take a closer look at four approaches used to identify these effects. We find that the effects that some studies have attributed to common ownership are caused by othe...

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Published in:Journal of financial economics 2021-07, Vol.141 (1), p.322-344
Main Authors: Lewellen, Katharina, Lowry, Michelle
Format: Article
Language:English
Subjects:
Business ownership
Business schools
Common ownership
Contests
Cooperation
Coordination
Corporate governance
Economic crisis
Institutional ownership
Ownership
Social networks
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description A growing number of studies suggest that common ownership caused cooperation among firms to increase and competition to decrease. We take a closer look at four approaches used to identify these effects. We find that the effects that some studies have attributed to common ownership are caused by other factors, such as differential responses of firms (or industries) to the 2008 financial crisis. We propose a modification to one of the previously used empirical approaches that is less sensitive to these issues. Using this to re-evaluate the link between common ownership and firm outcomes, we find little robust evidence that common ownership affects firm behavior.
doi_str_mv 10.1016/j.jfineco.2021.03.008
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source International Bibliography of the Social Sciences (IBSS); ScienceDirect Journals
subjects Business ownership
Business schools
Common ownership
Contests
Cooperation
Coordination
Corporate governance
Economic crisis
Institutional ownership
Ownership
Social networks
title Does common ownership really increase firm coordination?
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