Who's Paying Attention? Measuring Common Ownership and Its Impact on Managerial Incentives / Erik P. Gilje, Todd Gormley, Doron Y. Levit.

Format:

Book

Author/Creator:

Gilje, Erik P.

Contributor:

National Bureau of Economic Research.

Gormley, Todd.

Levit, Doron Y.

Series:

Working Paper Series (National Bureau of Economic Research) no. w25644.

NBER working paper series no. w25644

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2019.

Summary:

We derive a measure that captures the extent to which overlapping ownership structures shift managers' incentives to internalize externalities. A key feature of the measure is that it allows for the possibility that not all investors are attentive to whether a manager's actions benefit the investor's overall portfolio. Empirically, we show that potential drivers of ownership overlap, including mergers in the asset management industry and the growth of indexing, could in fact diminish managerial motives. Our findings illustrate the importance of accounting for investor inattention and cast doubt on the possibility that the growth of common ownership has had a significant impact on managerial incentives.

Notes:

Print version record

March 2019.