Abstract
We analyze how an increase in the degree of common ownership of firms in the same market affects consumption and investment. Such an increase is shown to reduce real investment and therefore intertemporal consumption. Overall, institutional investors’ common ownership of firms competing in the same market serves as a device for weakening market competition. The resulting increase in the price of acquiring shares with institutional investors then crowds out savings directed to real investments.
| Original language | English |
|---|---|
| Peer-reviewed scientific journal | Journal of Macroeconomics |
| Volume | 62 |
| ISSN | 0164-0704 |
| DOIs | |
| Publication status | Published - 23.08.2019 |
| MoE publication type | A1 Journal article - refereed |
UN SDGs
This output contributes to the following UN Sustainable Development Goals (SDGs)
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SDG 12 Responsible Consumption and Production
Keywords
- 511 Economics
- Common ownership
- institutional investors
- real versus financial investments
- market power
- savings and investments
- investment crowding-out
- overlapping generations
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