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Common ownership: Europe vs. the US

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  • Nuria Boot
  • Jo Seldeslachts
  • Albert Banal Estañol

Abstract

Common ownership - when an investor holds shares in two or more companies - has recently attracted signi cant attention from policy-makers and researchers, studying mainly US rms. European rms, however, are di erent as top investors with large stakes, like governments, founding families and foundations are much more prevalent. This paper takes a well-known common ownership with micro-economic foundations, lambda, capturing managerial incentives, and compares its implications for S&P Europe 350 rms to those of the S&P 500 for the period 2004-2015 by looking at within, across and global lambda patterns of the European and US S&P companies. We nd that US companies have a higher lambda, but European rms' lambda become both faster connected within Europe and across with their US counterpart where the latter is even more pronounced. Both patterns can be traced back to US investment managers' increasing global reach.

Suggested Citation

  • 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.
    • Handle: RePEc:ete:msiper:700180
    Note: paper number MSI_2205
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    1. Gibbon, Alexandra J. & Schain, Jan Philip, 2023. "Rising markups, common ownership, and technological capacities," International Journal of Industrial Organization, Elsevier, vol. 89(C).

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    More about this item

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • K15 - Law and Economics - - Basic Areas of Law - - - Civil Law; Common Law

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