Brown Bag Seminar Industrial Economics

This is an online seminar using Webex. You will receive the login data with the invitation to the talk.

Abstract:  This paper analyzes the relationship between common ownership – when two firms are partially held by the same investor – and markups. Combining firm-level financial data from Europe with ownership data of publicly listed firms, we structurally estimate production functions and markups, as a measure for market power. We find a robust positive relationship between firms' common ownership measures and their markups. A standard deviation increase in the level of common ownership with firms in the same industry is associated with an increase of 2-3% in firm markups. We further find that, if anything, the relation between common ownership and productivity is negative. Our results hint at common ownership increasing market power.