Common-Ownership Concentration and Corporate Conduct

Posted: 8 Nov 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: November 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 level at which corporate control is exercised. 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 a 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.

Suggested Citation

Schmalz, Martin C. and Schmalz, Martin C., Common-Ownership Concentration and Corporate Conduct (November 2018). Annual Review of Financial Economics, Vol. 10, pp. 413-448, 2018, Available at SSRN: or

Martin C. Schmalz (Contact Author)

CEPR ( email )

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University of Oxford - Finance ( email )

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European Corporate Governance Institute (ECGI) ( email )

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