Product Market Competition in a World of Cross-Ownership: Evidence from Institutional Blockholdings

• 成果类型: Article
• 署名作者: He, Jie (Jack); Huang, Jiekun
• 署名单位: University System of Georgia; University of Georgia; University of Illinois System; University of Illinois Urbana-Champaign
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhx028
• 发表日期: 2017
• 页码: 2674
• 关键词: corporate equity ownership; LARGE-BLOCK TRANSACTIONS; STRATEGIC ALLIANCES; FINANCIAL STRENGTH; firm performance; joint ventures; Mutual funds; mergers; governance; industry

摘要

We analyze the effects of institutional cross-ownership of same-industry firms on product market performance and behavior. Our results show that cross-held firms experience significantly higher market share growth than do non-cross-held firms. We establish causality by relying on a difference-in-differences approach based on the quasi-natural experiment of financial institution mergers. We also find evidence suggesting that institutional cross-ownership facilitates explicit forms of product market collaboration (such as within-industry joint ventures, strategic alliances, or within-industry acquisitions) and improves innovation productivity and operating profitability. Overall, our evidence indicates that cross-ownership by institutional blockholders offers strategic benefits by fostering product market coordination.