Whether expanding voting rights of shareholders leads to improved corporate governance is a matter of controversy. BEBCHUK [2005, p. 836] argues that increased voting rights lead to better-aligned incentives of managers. ROMANO [1993, pp. 56f.] has a more skeptical view and maintains that, in...

We present a mechanism based on managerial incentives through which common ownershipaffects product market outcomes. Firm-level variation in common ownership causes varia-tion in managerial incentives and productivity across firms, which leads to intra-industryand intra-firm cross-market...

We show theoretically and empirically that executives are paid less for their own firm's performance and more for their rivals' performance if an industry's firms are more commonly owned by the same set of investors. Higher common ownership also leads to higher unconditional total pay. We...

When one firm's strategy affects other firms' value, optimal executive incentives depend on whether shareholders have interests in only one or in multiple firms. Performance-sensitive contracts induce managerial effort to reduce costs, and lower costs induce higher output. Hence, greater...

A firm's incentives to innovate deteriorate when other firms benefit from its R&D activities without incurring a cost. We show under which conditions common ownership of firms can mitigate this impediment to corporate innovation, and test the model's empirical predictions. Common ownership...

We show theoretically and empirically that executives are paid less for their own firm’s performance and more for their rivals’ performance if an industry’s firms are more commonly owned by the same set of investors. Higher common ownership also leads to higher unconditional total pay. We...