Who Is Afraid of BlackRock?

93 Pages Posted: 9 Aug 2015 Last revised: 7 Dec 2018

See all articles by Massimo Massa

Massimo Massa

INSEAD - Finance

David Schumacher

McGill University

Yan Wang

McMaster University

Multiple version iconThere are 2 versions of this paper

Date Written: December 3, 2018


We exploit the merger between BlackRock and Barclays Global Investors to study how changes in expected ownership concentration affect the investment behavior of funds and the cross-section of stocks worldwide. We find that funds with open-end structures and a large exposure to commonly-held stocks begin avoiding these stocks following the merger announcement. This leads to a permanent change in the composition of institutional ownership which has a negative price and liquidity impact. We confirm these results in a large sample of global asset management mergers. Our findings suggest that market participants act strategically in response to changes in expected financial fragility.

Keywords: Financial Fragility, Strategic Interactions, Asset Management Mergers

JEL Classification: G11, G12, G14, G15, G23

Suggested Citation

Massa, Massimo and Schumacher, David and Wang, Yan, Who Is Afraid of BlackRock? (December 3, 2018). INSEAD Working Paper No. 2015/60/FIN. Available at SSRN: https://ssrn.com/abstract=2641078 or http://dx.doi.org/10.2139/ssrn.2641078

Massimo Massa

INSEAD - Finance ( email )

Boulevard de Constance
F-77305 Fontainebleau Cedex
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+33 1 6072 4045 (Fax)

David Schumacher (Contact Author)

McGill University ( email )

1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5
5143984778 (Phone)

HOME PAGE: http://www.davidschumacher.info

Yan Wang

McMaster University ( email )

1280 Main Street West
Hamilton, Ontario L8S 4M4

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