May 7, 2020

Brown Bag Seminar Cluster Industrial Economics

Common Ownership, Markups and Productivity: Evidence from European Firms

Date

May 7, 2020
14:30 - 15:30

Location

Online seminar via Webex

Speaker

Nuria Boot

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.

Speaker

Nuria Boot, DIW Berlin & KU Leuven