Institutional Investors, Common Control, and Risk: An Investigation into Motives and Consequences

Institutional Investors, Common Control, and Risk: An Investigation into Motives and Consequences

Ping Wang, James Barrese St. John's University
January 01, 2019
SKU: BUS-00672

Region of the world: North America
Topic: Strategy & General Management
Page length: 17
Keywords: corporate ownership, investors, risk
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This paper provides a synthesis of the recent literature related to corporate ownership issues and theoretical models of corporate and industry interactions linked through common ownership by institutional investors. The paper elaborates a theme observed by Azar and others with a focus on airlines (2017) and banking (2016). We supply a mathematical framework suggesting that homogeneity in operations of firms under common ownership may put the institutional owner’s long-term interest at risk. To stimulate future research, we present a preliminary analysis of two sampled industries. Common ownership is also observed in other industries.

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