
Anti-Competitive Effects of Common Ownership [pdf] - taofu
https://www.bc.edu/content/dam/files/schools/csom_sites/finance/Schmalz-031115.pdf
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avivo
The thesis is ~ that just having the same inactive institutional investors
owning shares in competing companies discourages competition and hurts
consumers.

I highly recommend reading the conclusion -- some excerpts/context:
"Consolidation in the asset management industry has potentially large anti-
competitive effects, even compared to mergers of natural competitors in the
product market itself. "

"Consistent with investors’ economic incentives and established economic
theory, we find that when firms don’t have incentives to compete, they don’t.
Specifically, we use more than 10 years of market-firm-level panel data from
the airline industry to show that common ownership has a large and significant
positive effect on product prices."

This is fascinating, especially in light of the analysis of "The Network of
Global Corporate [Ownership]"
[http://journals.plos.org/plosone/article?id=10.1371/journal....](http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0025995)
\-- it explores the graph/structure of ownership among the largest
organizations.

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gruez
relevant article?

[https://news.ycombinator.com/item?id=10009740](https://news.ycombinator.com/item?id=10009740)

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kspaans
I wonder if this could lead to firms like Vanguard and BlackRock not using
their proxy votes. Or perhaps creating a system where index fund investors get
to vote based on the shares they indirectly own. E.g. my 1000 shares of VTI
means I get 10 votes at Apple shareholder meetings.

