A Surrebuttal: There Are No Anti-Competitive Effects of Common Ownership in the Airline Industry

Abstract

The influential paper by Azar et al. (2018) presents empirical evidence from the airline industry that institutional investors who own shares in firms that are product-market rivals leads to anti-competitive behavior and higher prices. Dennis et al. (2022) refute this contention and show using a placebo analysis that the results in Azar et al. (2018) are driven by the market share component of the measure of common ownership rather than the investor component. Azar et al. (2022) present a critique of the Dennis et al. (2022) placebo analysis and argue that the conclusions of Azar et al. (2018) are valid. This paper shows that the conclusions in Dennis et al. (2022) still hold in light of the Azar et al. (2022) critique.

Keywords: Common Owners, Competition, Airlines

JEL Classification: G33, G34, G38, L41, L11