Horizontal Shareholding As An Antitrust Violation

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Horizontal Shareholding As An Antitrust Violation

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Title: Horizontal Shareholding As An Antitrust Violation
Author: Elhauge, Einer Richard
Citation: Einer Elhauge, Horizontal Shareholding As An Antitrust Violation (Harvard John M. Olin Discussion Paper Series Paper No. 834, July 2015).
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Abstract: Horizontal shareholdings exist when a common set of investors own significant shares in corporations that are horizontal competitors in a product market. Economic models show that such horizontal shareholdings are likely to anticompetitively raise prices when the owned businesses compete in a concentrated market. Recent empirical work not only confirms the prediction of these models, but also reveals that such horizontal shareholdings are omnipresent in our economy. I show that such horizontal shareholdings can help explain fundamental economic puzzles, including why corporate executives are rewarded for industry performance rather than just individual corporate performance, why corporations have not used recent high profits to expand output and employment, and why economic inequality has risen in recent decades. I also show that stock acquisitions that create such anticompetitive horizontal shareholdings are illegal under current antitrust law, and I recommend antitrust enforcement actions to undo them and their adverse economic effects.
Published Version: http://www.law.harvard.edu/programs/olin_center/papers/pdf/Elhauge_834.pdf
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:17741709
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