Ownership, Concentration, and Investment
AEA Papers and Proceedings
vol. 108,
May 2018
(pp. 432-37)
Abstract
The US business sector has underinvested relative to profits, funding costs, and Tobin's Q since the early 2000s. Building on prior work, we argue that decreasing competition, rising intangibles, and tightening governance explain, respectively, about one-half, one-third, and one-sixth of the investment gap. In particular, quasi-indexer ownership appears to lower investment, and this effect is stronger in noncompetitive industries.Citation
Gutiérrez, Germán, and Thomas Philippon. 2018. "Ownership, Concentration, and Investment." AEA Papers and Proceedings, 108: 432-37. DOI: 10.1257/pandp.20181010Additional Materials
JEL Classification
- D22 Firm Behavior: Empirical Analysis
- D25 Intertemporal Firm Choice: Investment, Capacity, and Financing
- G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
- G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
- L25 Firm Performance: Size, Diversification, and Scope