The relative roles of common- and cross-ownership

Cristian Huse; Ricardo Ribeiro; Frank Verboven

The relative roles of common- and cross-ownership

Cristian Huse, Ricardo Ribeiro, Frank Verboven

Research output: Other contribution

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Abstract

Overlapping ownership has gained considerable momentum in the last decades, yet little is known about the role of its sources. We quantify the relative importance of common-ownership (by shareholders external to an industry) and cross-ownership (by firms within the industry). We focus on the global automobile industry, over the period 2007–2021, and document that common-ownership links constitute between 31% and 39% of the equity ownership of automobile manufacturers, while cross-ownership links amount to 6%–9%. We show that not accounting for these relatively modest cross-ownership links has important implications: it can increase the average weight assigned by managers to the profit of competitors by between 33% and 68%.

Original language	English
Type	Policy Brief
Publisher	Universidade Católica Portuguesa
Number of pages	3
Place of Publication	Porto
Publication status	Published - Aug 2024

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107029677Final published version, 492 KBLicence: Unspecified

http://hdl.handle.net/10400.14/46984Licence: Unspecified

CEGE: Research Center in Management and Economics
Silva, M. (Full Professor), Sousa, R. (Full Professor), Alves, P. (Assistant Professor), Madsen, A. (Invited Assistant Professor), Lourenço, A. (Associate Professor), Carvalho, A. S. (Associate Professor), Andrade, A. (Assistant Professor), Silva, P. D. (Associate Professor), Vlačić, B. (Invited Assistant Professor), Martins, C. (Invited Assistant Professor), Gomes, C. (Auxiliary Researcher), Gevrek, Z. E. (Invited Assistant Professor), Oliveira, F. G. D. (Associate Professor), Faria, G. (Invited Associate Professor), Marreiros, H. (Scholarship holder), Pinho, J. (Invited Assistant Professor), Machado, J. (Associate Professor), Araújo, J. (Auxiliary Researcher), Pinto, J. (Assistant Professor), Rego, A. (Full Professor), Gaspar, J. M. (Auxiliary Researcher), Corbo, L. (Invited Assistant Professor), Costa, L. (Associate Professor), Fernandes, L. (Assistant Professor), Sottomayor, M. (Assistant Professor), Martins, N. (Full Professor), Hernández-Marrero, P. (Auxiliary Researcher), Gonçalves, R. (Associate Professor), Ribeiro, R. (PI), Coelho, S. L. (Assistant Teacher), Pereira, S. M. (Auxiliary Researcher), Silva, S. (Associate Professor), Rodrigues, V. (Associate Professor), Sotiros, D. G. (Auxiliary Researcher), Valverde, C. (Assistant Professor), Leitão, A. (Assistant Professor), Julião, J. (Assistant Professor), Tavares, M. (Assistant Professor), Lages, C. R. (Auxiliary Researcher), Elmashhara, M. G. (Auxiliary Researcher) & Teymourifar, A. (Auxiliary Researcher)
1/01/20 → 31/12/24
Project: Other

Cite this

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title = "The relative roles of common- and cross-ownership",

abstract = "Overlapping ownership has gained considerable momentum in the last decades, yet little is known about the role of its sources. We quantify the relative importance of common-ownership (by shareholders external to an industry) and cross-ownership (by firms within the industry). We focus on the global automobile industry, over the period 2007–2021, and document that common-ownership links constitute between 31% and 39% of the equity ownership of automobile manufacturers, while cross-ownership links amount to 6%–9%. We show that not accounting for these relatively modest cross-ownership links has important implications: it can increase the average weight assigned by managers to the profit of competitors by between 33% and 68%.",

author = "Cristian Huse and Ricardo Ribeiro and Frank Verboven",

year = "2024",

month = aug,

language = "English",

publisher = "Universidade Cat{\'o}lica Portuguesa",

address = "Portugal",

type = "Other",

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TY - GEN

T1 - The relative roles of common- and cross-ownership

AU - Huse, Cristian

AU - Ribeiro, Ricardo

AU - Verboven, Frank

PY - 2024/8

Y1 - 2024/8

N2 - Overlapping ownership has gained considerable momentum in the last decades, yet little is known about the role of its sources. We quantify the relative importance of common-ownership (by shareholders external to an industry) and cross-ownership (by firms within the industry). We focus on the global automobile industry, over the period 2007–2021, and document that common-ownership links constitute between 31% and 39% of the equity ownership of automobile manufacturers, while cross-ownership links amount to 6%–9%. We show that not accounting for these relatively modest cross-ownership links has important implications: it can increase the average weight assigned by managers to the profit of competitors by between 33% and 68%.

AB - Overlapping ownership has gained considerable momentum in the last decades, yet little is known about the role of its sources. We quantify the relative importance of common-ownership (by shareholders external to an industry) and cross-ownership (by firms within the industry). We focus on the global automobile industry, over the period 2007–2021, and document that common-ownership links constitute between 31% and 39% of the equity ownership of automobile manufacturers, while cross-ownership links amount to 6%–9%. We show that not accounting for these relatively modest cross-ownership links has important implications: it can increase the average weight assigned by managers to the profit of competitors by between 33% and 68%.

M3 - Other contribution

PB - Universidade Católica Portuguesa

CY - Porto

ER -

The relative roles of common- and cross-ownership

Abstract

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CEGE: Research Center in Management and Economics

Cite this