Consolidation in the Financial Industry and its impact on Market Power
Many natural competitors are jointly held by a small set of large institutional investors. Big asset companies such as Blackrock, Vanguard, Capital Group, Berkshire Hathaway jointly own large portions of a company’s shares.. and as well their competitors. This is happening in many different sectors: the US airline industry, Pharma, Banking… If we take common ownership into account market concentration increases even to higher levels.
Hence, the big question is whether this increased horizontal shareholding of a few asset companies can explain diminishing competition in many industries? And, if so, what could be the plausible mechanisms?
- Mireia Giné is Assistant Professor in the Department of Financial Management at IESE Business School. She received her Bachelors and an MSc in Economics from Pompeu Fabra University. She received her Ph.D. from University of Barcelona and was a visiting scholar at MIT (1999) and at the University of Pennsylvania (2000-2001). <P>Prior to joining IESE, Prof. Giné spent more than ten years at the Wharton School, University of Pennsylvania, as a Director at Wharton Research Data Services (WRDS). WRDS has become the global standard for data infrastructure and research applications to more than 390 academic and financial institutions around the world. Prof. Giné joined WRDS in 2001 in the early development phase as part of the research team. Currently, she oversees the group's international initiatives and business development, both on the academic and corporate front.<P>Prof. Giné research interests are focused on corporate finance and governance. Her work examines how corporate governance mechanisms provide value to firms and how they impact corporate policies such as investments, M&A activity or compensation practices. Recently, she has been studying how shareholder activism affects corporate decision-making, firm performance and compensation practices. Her research has been published in the Journal of Finance and the Review of Finance and has received several academic awards such as The Brattle Prize.