Does Common Ownership Really Increase Firm Coordination?

83 Pages Posted: 4 Mar 2019 Last revised: 19 Mar 2021

See all articles by Katharina Lewellen

Katharina Lewellen

Dartmouth College - Tuck School of Business

Michelle Lowry

Drexel University; European Corporate Governance Institute (ECGI)

Date Written: March 5, 2021


A growing number of studies suggest that common ownership caused cooperation among firms to increase and competition to decrease. We take a closer look at four approaches used to identify these effects. We find that the effects that some studies have attributed to common ownership are caused by other factors, such as differential responses of firms (or industries) to the 2008 financial crisis. We propose a modification to one of the previously used empirical approaches that is less sensitive to these issues. Using this to re-evaluate the link between common ownership and firm outcomes, we find little robust evidence that common ownership affects firm behavior.

Keywords: common ownership, institutional investors, corporate governance

JEL Classification: G23, G32, G34, L22

Suggested Citation

Lewellen, Katharina and Lowry, Michelle B., Does Common Ownership Really Increase Firm Coordination? (March 5, 2021). Journal of Financial Economics (JFE), Forthcoming, Tuck School of Business Working Paper No. 3336343, European Corporate Governance Institute – Finance Working Paper No. 741/2021, Available at SSRN: or

Katharina Lewellen

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

Michelle B. Lowry (Contact Author)

Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States

European Corporate Governance Institute (ECGI) ( email )

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

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