The Competitive Effects of Common Ownership: Economic Foundations and Empirical Evidence: Reply

8 Pages Posted: 30 Sep 2017 Last revised: 27 Sep 2018

See all articles by José Azar

José Azar

University of Navarra, IESE Business School; CEPR

Martin C. Schmalz

University of Oxford - Finance; CEPR; CESifo; European Corporate Governance Institute (ECGI)

Isabel Tecu

Charles River Associates (CRA)

Date Written: September 20, 2018

Abstract

Kennedy, O’Brien, Song, and Waehrer (2017) replicate the panel results of Azar, Schmalz and Tecu (forthcoming), but argue on theoretical grounds that the estimates should not be interpreted as anti-competitive effects of common ownership. They then develop and estimate alternative models and find no significant positive effects of common ownership on airline ticket prices. This note points out features of their empirical analysis that cast doubt on the reliability of their method and results. Their conclusion that the data do not support AST’s interpretation seems unwarranted.

Keywords: Competition, Ownership, Diversification, Pricing, Antitrust, Governance, Product Market

JEL Classification: L41, L10, G34

Suggested Citation

Azar, José and Schmalz, Martin C. and Tecu, Isabel, The Competitive Effects of Common Ownership: Economic Foundations and Empirical Evidence: Reply (September 20, 2018). Available at SSRN: https://ssrn.com/abstract=3044908 or http://dx.doi.org/10.2139/ssrn.3044908

José Azar

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

CEPR ( email )

London
United Kingdom

HOME PAGE: http://https://sites.google.com/site/joseazar/

Martin C. Schmalz (Contact Author)

University of Oxford - Finance ( email )

United States

CEPR ( email )

London
United Kingdom

CESifo ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Isabel Tecu

Charles River Associates (CRA) ( email )

1201 F. St. NW
Ste. 700
Washington, DC 20004
United States

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