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Author: Alessandro Romano
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This paper uses network theory to argue that the consequences of horizontal ownership by large investment institutions are more complicated than, and sometimes completely the opposite of, what conventional economic theory predicts. Horizontal ownership occurs when a large investment institution, such as Vanguard or Blackrock, simultaneously holds large stakes in many different companies in the same industry. Legal scholars and economists have argued that these large investors have little incentive to encourage competition in the industries in which they have horizontal ownership, because the investors are just as likely to hold shares in companies that might lose from competition as they are to hold shares in companies that might gain.Against this background, this paper advances two claims. First, it shows that the policy proposals that have been advanced to address the alleged anticompetitive effects of horizontal shareholding could backfire and further reduce the level of competition in the markets. Second, it highlights that the consequences of horizontal shareholding are very nuanced, because things that happen in one industry inevitably affect other industries. For instance, increased ticket prices among airlines might be good for airlines, but bad for their suppliers. Therefore, determining whether reduced competition in a given industry would benefit an investor requires us to compare the gains it generates in the relevant market with the losses it would impose onto other firms in the investor's portfolio. I work through the mechanics of these calculations and identify a method already developed in network theory that could help us perform them. I also show that in some markets (i.e. “central markets”) horizontal shareholders might have more incentives than undiversified shareholders to promote aggressive competition. I then outline a new set of regulatory tools, which I call “Network Sensitive Regulations,” that could address the anticompetitive effects of horizontal shareholding in a manner that would be sensitive to the nuances of these network effects.
Author: Alessandro Romano
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This paper uses network theory to argue that the consequences of horizontal ownership by large investment institutions are more complicated than, and sometimes completely the opposite of, what conventional economic theory predicts. Horizontal ownership occurs when a large investment institution, such as Vanguard or Blackrock, simultaneously holds large stakes in many different companies in the same industry. Legal scholars and economists have argued that these large investors have little incentive to encourage competition in the industries in which they have horizontal ownership, because the investors are just as likely to hold shares in companies that might lose from competition as they are to hold shares in companies that might gain.Against this background, this paper advances two claims. First, it shows that the policy proposals that have been advanced to address the alleged anticompetitive effects of horizontal shareholding could backfire and further reduce the level of competition in the markets. Second, it highlights that the consequences of horizontal shareholding are very nuanced, because things that happen in one industry inevitably affect other industries. For instance, increased ticket prices among airlines might be good for airlines, but bad for their suppliers. Therefore, determining whether reduced competition in a given industry would benefit an investor requires us to compare the gains it generates in the relevant market with the losses it would impose onto other firms in the investor's portfolio. I work through the mechanics of these calculations and identify a method already developed in network theory that could help us perform them. I also show that in some markets (i.e. “central markets”) horizontal shareholders might have more incentives than undiversified shareholders to promote aggressive competition. I then outline a new set of regulatory tools, which I call “Network Sensitive Regulations,” that could address the anticompetitive effects of horizontal shareholding in a manner that would be sensitive to the nuances of these network effects.
Author: Fiona M. Scott Morton
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
“Horizontal shareholding” occurs when one or more equity funds own shares of competitors operating in a concentrated product market. For example, the four largest mutual fund companies might be large shareholders of all the major United States air carriers. A growing body of empirical literature concludes that under these conditions market output in the product market is lower and prices higher than they would otherwise be. Here we consider how the antitrust laws might be applied to this practice, identifying the issues that courts are likely to encounter and attempting to anticipate litigation problems. We assume that neither the mutual fund managers nor the firms in the product or service market are fixing prices in a way that would subject them to antitrust liability. Section 1 of the Sherman Act and §7 of the Clayton Act take quite different approaches to this problem, but each could be brought to bear. While the current literature on horizontal shareholding does not offer a single robust explanation of how the price increase mechanism works, we show that the “effects” test expressed in the Clayton Act does not require proof of the precise mechanism. Further, §7's “solely for investment” exception typically will not apply. We also briefly discuss special problems of private plaintiff challenges. Finally, we elaborate the two ways that efficiencies are relevant to analysis of such mergers. First, we show why the efficiency defense as currently formulated will seldom or never save such a merger. Secondly we discuss the problem of remedial efficiencies, or mechanisms for ensuring that judicial relief will not impose its own consumer harm.
Author: Marco Corradi
Publisher: Cambridge University Press
ISBN: 1108841872
Category : Business & Economics
Languages : en
Pages : 353
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Book Description
Examines the intersections between corporate and antitrust law, focusing on corporate interest, governance, and the financial links among companies.
Author: Alon Brav
Publisher: Now Publishers Inc
ISBN: 1601983387
Category : Business & Economics
Languages : en
Pages : 76
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Book Description
Hedge Fund Activism begins with a brief outline of the research literature and describes datasets on hedge fund activism.
Author: Florence Thépot
Publisher: Cambridge University Press
ISBN: 1108526365
Category : Law
Languages : en
Pages : 317
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Book Description
Florence Thépot provides the first systematic account of the interaction between competition law and corporate governance. She challenges the 'black box' conception of the firm- or 'undertaking' - in competition law, as applied to increasingly complex corporate relations. The book opens the 'black box' of the firm to understand the internal drivers of collusive behaviour, and proposes a unified approach to cartel enforcement, based on the agency theory. It explores key issues including corporate compliance programmes, the attribution of liability in corporate groups, and structural links between competitors, and should be read by anyone interested in how the evolution of the corporate landscape impacts competition law.
Author: Daniel Gore
Publisher: Cambridge University Press
ISBN: 1107007720
Category : Business & Economics
Languages : en
Pages : 559
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Book Description
Provides a clear, concise and practical overview of the key economic techniques and evidence employed in European merger control.
Author: Mark Fenwick
Publisher: Springer Nature
ISBN: 9811558191
Category : Law
Languages : en
Pages : 235
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Book Description
This book focuses on Fintech regulation in Asian, situating local developments in broader economic, regulatory and technological contexts. Over the last decade, Fintech – broadly defined as the use of new information technologies to help financial institutions and intermediaries compete in the marketplace – has disrupted the financial services sector. Like other 21st century technological developments, Fintech is a global phenomenon that plays out in local economic, political and regulatory contexts, and this dynamic interplay between global trends and local circumstances has created a complex and fast-changing landscape. Diverse stakeholders (most obviously incumbent financial service providers, tech start-ups and regulators) all pursue a competitive edge against a background of profound uncertainty about the future direction and possible effects of multiple emerging technologies. Compounding these difficulties are uncertainties surrounding regulatory responses. Policymakers often struggle to identify appropriate regulatory responses and increasingly turn to policy experimentation. Such issues add to the challenges for the various actors operating in the Fintech space. This situation is particularly fluid in Asia, since many jurisdictions are seeking to establish themselves as a regional hub for new financial services.
Author: Iris H-Y Chiu
Publisher: Bloomsbury Publishing
ISBN: 1509953779
Category : Law
Languages : en
Pages : 491
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Book Description
This book brings together thought leadership from academia and leading figures in asset management in key global jurisdictions, to pool together insights regarding the transformative visions and challenges for modern investment management, as well as best practices that realise the policy objectives in regulation and soft law. The world of investment management is being challenged by new legal, regulatory and soft law developments to demonstrate that their practices cohere with the long-term needs of the saving population as well as public interest needs in financing global sustainability and social development. The chapters in this book uniquely bring together the views of academia and practice on the key developments that can transform the law and practice of investment management, including the EU's new sustainable finance reform package, the UK Stewardship Code 2020, and developments in the US regarding the fit between fiduciary law for investment management and modern sustainability concerns. The book brings together the best of both worlds–critical thoughtful perspectives from academia and qualitative insight from the investment management industry. It will be of interest to researchers in law, investment management, business and management, practitioners in the investment management industry and their legal advisers, and policy-makers in the EU, UK and beyond who are grappling with the appropriate governance paradigms for bringing about more sustainable outcomes globally.
Author: Jean Tirole
Publisher: Princeton University Press
ISBN: 1400830222
Category : Business & Economics
Languages : en
Pages : 657
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Book Description
"Magnificent."—The Economist From the Nobel Prize–winning economist, a groundbreaking and comprehensive account of corporate finance Recent decades have seen great theoretical and empirical advances in the field of corporate finance. Whereas once the subject addressed mainly the financing of corporations—equity, debt, and valuation—today it also embraces crucial issues of governance, liquidity, risk management, relationships between banks and corporations, and the macroeconomic impact of corporations. However, this progress has left in its wake a jumbled array of concepts and models that students are often hard put to make sense of. Here, one of the world's leading economists offers a lucid, unified, and comprehensive introduction to modern corporate finance theory. Jean Tirole builds his landmark book around a single model, using an incentive or contract theory approach. Filling a major gap in the field, The Theory of Corporate Finance is an indispensable resource for graduate and advanced undergraduate students as well as researchers of corporate finance, industrial organization, political economy, development, and macroeconomics. Tirole conveys the organizing principles that structure the analysis of today's key management and public policy issues, such as the reform of corporate governance and auditing; the role of private equity, financial markets, and takeovers; the efficient determination of leverage, dividends, liquidity, and risk management; and the design of managerial incentive packages. He weaves empirical studies into the book's theoretical analysis. And he places the corporation in its broader environment, both microeconomic and macroeconomic, and examines the two-way interaction between the corporate environment and institutions. Setting a new milestone in the field, The Theory of Corporate Finance will be the authoritative text for years to come.
Author: United States. Federal Communications Commission
Publisher:
ISBN:
Category : Telecommunication
Languages : en
Pages : 978
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Book Description
