Common ownership and competitive dissimilarity: A global perspective on competition and institutional ownership

IF 5.7 2区 管理学 Q1 BUSINESS
Philip J. Steinberg, Jan C. Hennig, Jana Oehmichen, Judith Heigermoser
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引用次数: 0

Abstract

Research Summary

Research highlights that common institutional ownership (an investor owning publicly traded shares in two rival firms) can reduce rivals' incentives to compete. So far, this literature focused on domestic market competition. However, competition also arises in global markets, and common owners invest outside their home countries. We integrate the perspectives of global market competition and cross-national distance into a model of shared principals with rival agents and argue for a positive effect of common ownership on rivals' competitive dissimilarity in global markets. Moreover, we argue that the competitive intensity in joint regions amplifies, and the cross-national distance between common owners and their firms mitigates this effect. We find support for our theorizing using a multi-industry dataset with 1574 of the largest firms worldwide.

Managerial Summary

When investors hold shares in two competing companies, it can reduce how aggressively those rivals compete. To avoid direct competition, these companies often adopt divergent strategic actions. Our research shows that this dynamic extends to how competitors behave in international markets. We also identify key boundary conditions to this effect: The effect weakens when competition within shared markets decreases and when the distance between the owned rivals and their common investor increases. For managers of globally operating companies, this highlights the need to consider not just competitors' strategies but also their ownership structure. Overlapping ownership could significantly influence competitive dynamics in global markets by shaping competitors' strategic approaches.

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来源期刊
CiteScore
14.20
自引率
11.80%
发文量
46
期刊介绍: The Global Strategy Journal is a premier platform dedicated to publishing highly influential managerially-oriented global strategy research worldwide. Covering themes such as international and global strategy, assembling the global enterprise, and strategic management, GSJ plays a vital role in advancing our understanding of global business dynamics.
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