Discussion paper

DP11471 Who is afraid of BlackRock?

We use the merger of BlackRock with Barclays Global Investors to study how changes in ownership concentration
affect the investment behavior of financial institutions and the cross-section of stocks worldwide. We find that other
institutions begin avoiding stocks that experience a merger-related increase in ownership concentration. As a result,
affected stocks experience a permanent and negative price, liquidity and volatility impact. We confirm these effects
in a large sample of asset management mergers over a ten year period. The interpretation that institutions
strategically avoid stocks with an elevated risk of future fragility enjoys the strongest support in the data.


Massa, M (2016), ‘DP11471 Who is afraid of BlackRock?‘, CEPR Discussion Paper No. 11471. CEPR Press, Paris & London. https://cepr.org/publications/dp11471