Common Ownership, Competition, and Top Management Incentives
Open accessAbstract
We present a mechanism based on managerial incentives through which common ownership affects product market outcomes. Firm-level variation in common ownership causes variation in managerial incentives and productivity across firms, which leads to intra-industry and intra-firm cross-market variation in prices, output, markups, and market shares that is consistent with empirical evidence. The organizational structure of multiproduct firms and the passivity of common owners determine whether higher prices under common ownership result from higher costs or from higher markups. Using panel regressions and a difference-in-differences design we document that managerial incentives are less performance-sensitive in firms with more common ownership.
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Antón, Ederer, Giné, and Schmalz (2016) show that common owners have incentives to reduce relative performance incentives, either actively or by omitting to support other shareholders' initiatives to implement relative performance incentives.
“Antón, Ederer, Giné, and Schmalz (2016) show that common owners have incentives to reduce relative performance incentives, either actively or by omitting to support other shareholders' initiatives to implement relative performance incentives.”
From Anticompetitive Effects of Common Ownership (2018) · cites this paper as Antón, Ederer, Giné, and Schmalz (2016)
Antón, Ederer, Giné, and Schmalz (2016) provide panel and IV evidence that management pay becomes less sensitive to performance relative to industry rivals when the industry becomes more concentrated.
“Antón, Ederer, Giné, and Schmalz (2016) provide panel and IV evidence that management pay becomes less sensitive to performance relative to industry rivals when the industry becomes more”
From Anticompetitive Effects of Common Ownership (2018) · cites this paper as Antón, Ederer, Giné, and Schmalz (2016)
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References 125 · Cited by 150
- Authors
- Anton, M., Ederer, F., Gine, M., & Schmalz, M. C.
- Affiliations
- IESE Business School (ES)
- Boston University (US)
- University of Oxford (GB)
- Corresponding author
- Schmalz, Martin C.
- Venue
- SSRN Electronic Journal
- Publisher
- Elsevier BV
- Published
- 2016
- ISSN
- 1556-5068 (ISSN-L)
- OpenAlex
- W2469072955
- Cited by
- 150
- References
- 125
- Citations by year
- 2026: 3 · 2025: 22 · 2024: 15 · 2023: 17 · 2022: 18 · 2021: 16 · 2020: 17 · 2019: 6 · 2018: 14 · 2017: 14 · 2016: 6 · 2015: 1 · 2013: 1
- Type
- posted content
- Language
- en
- Open access
- green
- doi.org
- Locations
- SSRN Electronic Journal (acceptedVersion)
- Funders
- Washington Center for Equitable Growth
- Deutsche Forschungsgemeinschaft (390838866)
- Generalitat de Catalunya (2014 SGR 1496)
- Topics
- Social Sciences › Business, Management and Accounting › Accounting › Corporate Finance and Governance
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Merger and Competition Analysis
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Firm Innovation and Growth
- Keywords
- collective ownership, managerial incentives, top management incentives, product market competition, markups, market share, firm productivity, multi-product firms, organizational structure, performance sensitivity
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