Do Publicly Traded Corporations Act in the Public Interest?
Open accessAbstract
Models of corporate behavior normally assume that a firm acts in the interest of shareholders, and that shareholders care only about the returns they receive on the shares they own in that firm. But shareholders should also care about the effects of a manager's decisions on the value of shares they own in other firms, on the price they pay as consumers for the firm's output, on the costs they bear from pollutants emitted by the firm, on the value of the firm's bonds they own, on government tax revenue that finances public expenditures benefiting shareholders, etc. These effects are normally presumed to be of second order. This paper reexamines this presumption, argues that many of these effects are likely to be important, and explores the resulting implications for forecasted corporate behavior.
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Anticompetitive Effects of Common Ownership
AZAR, J., SCHMALZ, M. C., & TECU, I. (2018) · The Journal of Finance · doi:10.1111/jofi.12698 · Cited by 980 · see citing works
“A long theoretical literature in industrial organization recognizes that common ownership of natural competitors by the same investors reduces incentives to compete: the benefits of competing aggressively to one firm – gains in market share – come at the expense of firms that are part of the same investors’ portfolio…”
- Authors
- Gordon, R. H.
- Affiliations
- University of California San Diego (US)
- Corresponding author
- Gordon, Roger H.
- Venue
- Advances in Economic Analysis & Policy
- Publisher
- Walter de Gruyter GmbH
- Published
- 2003-06-12
- Volume
- 3
- Issue
- 1
- ISSN
- 1538-0637 (ISSN-L)
- OpenAlex
- W2058948560
- Cited by
- 50
- References
- 0
- Citations by year
- 2026: 1 · 2025: 2 · 2024: 2 · 2023: 2 · 2022: 7 · 2021: 1 · 2020: 5 · 2019: 5 · 2018: 5 · 2017: 4 · 2016: 3 · 2014: 1 · 2013: 2 · 2012: 1
- FWCI
- 1.89
- Type
- journal article
- Language
- en
- Open access
- green
- doi.org
- Locations
- Advances in Economic Analysis & Policy (publishedVersion)
- National Bureau of Economic Research (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- SSRN Electronic Journal (submittedVersion)
- OpenGrey (Institut de l'Information Scientifique et Technique) (submittedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Accounting › Corporate Finance and Governance
- Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Social Responsibility Reporting
- Social Sciences › Business, Management and Accounting › Strategy and Management › Financial Reporting and Valuation Research
- Keywords
- public interest, firm behavior, shareholder interests, shareholder value, corporate governance, stakeholder theory, pollution costs, tax revenue, corporate social responsibility, management decision-making
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