A phenomenon known as “Common Ownership” arises when shareholders hold substantial stakes in competing firms. Although recent empirical evidence has illustrated how common concentrated owners are associated with higher product market prices and lower output, scholars remain divided as to the...

There are numerous studies on the effectiveness of boards that primarily focus on legal formalities, including gender diversity, board size, remuneration, board evaluation and the role of the chairman of the board. While attempting to design a one-size-fits-all framework, scholars approaching...

This chapter from the forthcoming Research Handbook on the Economics of Corporate Law (Claire Hill & Brett McDonnell, eds.) examines the role of shareholders in the modern American public corporation. The chapter starts with the Berle and Means (1932) problem of the separation of ownership and...

We present a simple model of common ownership in which an investor chooses its stake in competing firms in light of the effects on firm behavior and firm profits. Two firms compete in Cournot duopoly, and ownership affects a firm’s objective function in the manner posited by Bresnahan & Salop...

Although empirical studies show that common shareholding affects corporate conduct and that common horizontal shareholding lessens competition, critics have argued that the law should not take any action until we have clearer proof on the causal mechanisms. I show that we actually have ample...

The separation of ownership and control has always been central in corporate governance debates. A large body of literature has sought to show that control-enhancing arrangements can deter investors. However, the experience of the last few years has suggested that companies with widely dispersed...

One important effect of the sluggish IPO market is the focus on deregulation and the emergence of a new generation of securities markets. These deregulated markets are considered important to stimulate entrepreneurial activity and attract venture capital. This paper argues that the introduction...

Using a sample of US listed firms over the 1989-2012 period, we find that financially constrained dividend increasing firms experience superior short-run abnormal stock returns, but suffer worse operating performance compared to similar unconstrained firms. More specifically, constrained firms...

We study the propagation of corporate disclosure policy choices across firms connected by common analysts. We find strong similarities in disclosure policies among firms that share common analysts. We show that these similarities are attributable to both analyst coverage initiation decisions and...

Theory predicts the existence of explicit bilateral contracts between firms and expert shareholders. I assemble and analyze a large‐scale data set of these contracts. Using block investments from 1996 to 2018, I find that these contracts involve mainly corporate owners and activist owners, and...