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Changes in Common Ownership of German Companies

Author

Listed:
  • Jo Seldeslachts
  • Melissa Newham
  • Albert Banal-Estanol

Abstract

Ownership of publicly listed German companies has undergone significant changes in recent years. The aim of this report is to document these trends since 2007 and analyze the extent to which firms that compete in the same product market are owned by the same investors, which is known as common ownership. We show that some large foreign institutional investors have overtaken domestic investors and now occupy the top spots. This is true both in terms of value and the number of blockholdings, i.e. large blocks of shares.In addition, there has been an increase in ownership concentration overall. That said, private and governmental investors with few but large holdings, still own more than half of German equity. Using two leading industries, the chemical and car industries, we show that ownership trends and levels of common ownership can be very different across industries. While it is unclear a priori what common ownership implies for competition, innovation, and consumer welfare, markets that show more common ownership, such as the chemical sector, deserve more attention from policy makers, regulators, and academics alike.

Suggested Citation

  • Jo Seldeslachts & Melissa Newham & Albert Banal-Estanol, 2017. "Changes in Common Ownership of German Companies," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 7(30), pages 303-311.
    • Handle: RePEc:diw:diwdeb:2017-30-1
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.562469.de/diw_econ_bull_2017-30-1.pdf
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    Citations

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    Cited by:

    1. Melissa Newham & Jo Seldeslachts & Albert Banal-Estanol, 2018. "Common ownership and market entry: Evidence from the pharmaceutical industry," Working Papers of Department of Management, Strategy and Innovation, Leuven 623896, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.
    2. Zormpas, Dimitrios & Ruble, Richard, 2021. "The dynamics of preemptive and follower investments with overlapping ownership," Journal of Economic Dynamics and Control, Elsevier, vol. 129(C).
    3. Rosati, Nicoletta & Bomprezzi, Pietro & Martinez Cillero, Maria, 2024. "Critical dimensions in the empirical measurement of common shareholding," Research in International Business and Finance, Elsevier, vol. 70(PA).
    4. Gibbon, Alexandra J. & Schain, Jan Philip, 2023. "Rising markups, common ownership, and technological capacities," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    5. Nuria Boot & Jo Seldeslachts & Albert Banal Estañol, 2022. "Common ownership: Europe vs. the US," Working Papers of Department of Management, Strategy and Innovation, Leuven 700180, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.
    6. Antonio Estache & Christophe Kieffer, 2021. "Does Common Ownership Influence the Financial Strategy of the French Pharmaceutical Firms?," Working Papers ECARES 2021-09, ULB -- Universite Libre de Bruxelles.
    7. Hariskos, W. & Königstein, M. & Papadopoulos, K.G., 2022. "Anti-competitive effects of partial cross-ownership: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 399-409.
    8. Oz Shy & Rune Stenbacka, 2020. "Common ownership, institutional investors, and welfare," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(3), pages 706-723, July.
    9. Oz Shy, 2021. "College Education, Earning Inequality, and Market Power," Journal of Labor Research, Springer, vol. 42(3), pages 334-357, December.
    10. Shy, Oz & Stenbacka, Rune, 2019. "An OLG model of common ownership: Effects on consumption and investments," Journal of Macroeconomics, Elsevier, vol. 62(C).
    11. Stenbacka, Rune & Van Moer, Geert, 2023. "Overlapping ownership and product innovation," International Journal of Industrial Organization, Elsevier, vol. 89(C).

    More about this item

    Keywords

    institutional investors; common ownership; German markets; innovation; competition; antitrust;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics

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