A Multiple-Industry Panel Analysis of the Anti-Competitive Effects of Common Ownership

Author/​Artist
Rex, Hunter [Browse]
Format
Senior thesis
Language
English
Description
50 pages

Details

Advisor(s)
Hong, Harrison [Browse]
Department
Princeton University. Department of Economics [Browse]
Class year
2016
Summary note
Recent work in the industrial organization literature nds a signi cant relationship between increased levels of institutional ownership among natural competitors and higher product prices in certain industries. We extend this framework to quarterly cross-sections of the U.S. economy using industry-level concentration measures of publicly-traded companies. Panel analyses identify a signi cant positive e ect of both common ownership concentration and its lags on industry average gross pro ts when controlling for xed e ects. We implement a panel-IV strategy using changes in large index funds' industry ownership levels to address endogeneity concerns and suggest a causal link from increased common ownership to higher industry gross pro t margins.

Supplementary Information