DP19662 Common Ownership and Competition: Evidence from Ultimate Owners of Private and Public Firms
Firms under common ownership have incentives to internalize the consequences of their behavior on each other, potentially resulting in less competition. I exploit unique data from Norway to document the economy-wide extent of common ownership, covering private and public firms and the universe of shareholders. Using exogenous variation in common ownership at the firm-household level due to marriages among large individual shareholders, I provide causal evidence on the effect of common ownership on profit margins. I find that firms experiencing an increase in common ownership due to a marriage increase profit margins by 7 to 16 percentage points, compared to firms that are affected by similar marriages but do not experience a change in common ownership.
