Common-Ownership Concentration and Corporate Conduct

Annual Review of Financial Economics, Vol. 10, December 2018

CESifo Working Paper Series No. 6908

40 Pages Posted: 5 Oct 2017 Last revised: 18 May 2018

See all articles by Martin C. Schmalz

Martin C. Schmalz

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

Multiple version iconThere are 3 versions of this paper

Date Written: May 10, 2018


The question of whether and how partial common-ownership links between strategically interacting firms affect firm objectives and behavior has been the subject of theoretical inquiry for decades. Since then, the growth of intermediated asset management and consolidation in the asset-management sector has led to more pronounced common ownership links at the beneficial-owner level. Recent empirical research has provided evidence consistent with the literature's prediction that common ownership concentration (CoOCo) can affect product market outcomes. The resulting antitrust concerns have received worldwide attention. However, because CoOCo can change the objective function of the firm, the potential implications span all fields of economics that involve corporate conduct, including corporate governance, strategy, industrial organization, and financial economics. This article connects the papers establishing the theoretical foundations, reviews the empirical and legal literatures, and discusses challenges and opportunities for future research.

Keywords: ownership, control, network, industry concentration, antitrust, objective of the firm, shareholder unanimity

JEL Classification: D21, D22, G10, G30, G32, G34, J41, K21, L10, L16, L21, L40, L41, L42

Suggested Citation

Schmalz, Martin C. and Schmalz, Martin C., Common-Ownership Concentration and Corporate Conduct (May 10, 2018). Annual Review of Financial Economics, Vol. 10, December 2018, CESifo Working Paper Series No. 6908, Available at SSRN:

Martin C. Schmalz (Contact Author)

CEPR ( email )

United Kingdom

University of Oxford - Finance ( email )

United States

CESifo ( email )

Poschinger Str. 5
Munich, DE-81679

European Corporate Governance Institute (ECGI) ( email )

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

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
PlumX Metrics