Publications
Common Ownership, Competition, and Top Management Incentives (with Florian Ederer, Mireia Giné and Martin Schmalz). We show that common ownership (i.e., investors holding sizeable ownership stakes in several companies in the same or in related industries) may dampen the performance-sensitivity of CEO Pay.
– – Winner of the 2017 Oliver E. Williamson Best Conference Paper Award, SIOE, Columbia University
– – Winner of the 2016 First Research Prize, Fundacion Estudios Financieros
– – Media: The Economist, Bloomberg, Equitable Growth, Yale Insights, Harvard Law School Forum on Corporate Governance, ProMarket, Harvard Business Review.
Journal of Political Economy, 2023, Vol. 131, No. 5.
Mergers and Acquisitions under Common Ownership (with Florian Ederer, Mireia Giné and Bruno Pellegrino). We show that mergers increasingly occur between firms that sell similar products and share the same set of owners. We also show that effects of mergers on profits, consumer surplus and total surplus are substantial even when firms internalize common ownership before mergers occur.
AEA Papers & Proceedings, 2023, Vol. 113.
Beyond the Target: M&A Decisions and Rival Ownership (with Jose Azar, Mireia Giné and Luca Lin). Common Ownership increases the profitability of horizontal mergers not only due to their ownership stakes in the target, but also due to their stakes in non-merging rival firms.
Journal of Financial Economics, 2022, Volume 144, Issue 1.
The Mutual Friend: Dual Holder Monitoring and Firm Investment Efficiency (with Luca Lin). Dual holders mitigate firm overinvestment, because their incentives as debt and equity holders are more aligned.
Review of Corporate Finance Studies, 2020, Vol 9, Issue 1, 81-115.
Dealing with Dealers: Sovereign CDS Comovements in Europe (with Sergio Mayordomo and María Rodríguez-Moreno). Commonality in the quotes that dealers give for Sovereign European CDS is a powerful predictor of cross-sectional variation in CDS return correlation.
– – Winner of the 2014 First Research Prize, Fundacion Estudios Financieros.
– – Winner of the 2013 UAM-Accenture Prize in Financial Innovation.
– – Non-technical summary.
Journal of Banking and Finance, 2018, Vol 90, 96-112.
Connected Stocks (with Christopher Polk). Stocks connected through the same owners exhibit higher return correlation. A trading strategy based on these connections yields annual alpha of 7%.
– – Nominee for the Smith-Breeden Prize for the Best Paper in the Journal of Finance, 2014.
Journal of Finance, 2014, Vol 69, 1099-1127.
Good for One, Bad for All: Determinants of Indivitual versus Systemic Risk (with Germán López-Espinosa, Antonio Rubia, and Laura Valderrama). Trading activities within a bank are good for the bank’s solvency, but bad for all, because it amplifies systemic risk. We also find that unstable funding is the main factor driving systemic risk.
Journal of Financial Stability, 2013, Vol 9, 287-299.
Non-Refereed Publications
Does Common Ownership Increase Incentives for Mergers and Acquisitions? (with Jose Azar, Mireia Gine, and Luca X. Lin). Diversified acquirer shareholders can profit from value-destroying acquisitions not only through their target stakes, but also through their stakes in non-merging rival firms.
Competition Policy International, 2019, May 21.
Research: Index Funds Are Fueling Out-of-Whack CEO Pay Packages (with Florian Ederer, Mireia Gine, and Martin Schmalz). Common ownership may lead to less performance-sensitive compensation packages.
Harvard Business Review, 2016, October 18.
Working Papers
Innovation: The Bright Side of Common Ownership? (with Florian Ederer, Mireia Giné and Martin Schmalz). We show that common ownership (i.e., investors holding sizeable ownership stakes in several companies in the same or in related industries) has different implications for innovation depending on technology and product market spillovers.
– – Granted a 2018 NBER Innovation Small Grant.
– – Presented at the 2017 NBER Productivity, Innovation, and Entrepreneurship Conference, Boston.
Working Paper, 2021 March. R&R in Management Science.
Best Ideas (with Randy Cohen and Christopher Polk). The best ideas of fund managers consistently outperform the benchmark.
Working Paper, 2021 March. Under review.
Local Human Capital and Innovation Spillovers (with Liudmila Alekseeva). Local human capital has different intensity effects in urban areas depending on the strength of technological and product market spillovers.
Working Paper, 2020.
Acquisitions, Common Ownership, and the Cournot Merger Paradox (with Jose Azar, Mireia Giné and Luca Lin). We extend the theory of mergers under a symmetric Cournot game to allow for common ownership, and show that there are two conflicting effects on the incentive to merge.
Working Paper, 2019 August.
Common Ownership and Relative Performance Evaluation (with Florian Ederer, Mireia Giné and Martin Schmalz). We show theoretically and empirically that executives are paid less for their own firm’s performance and more for their rivals’ performance if an industry’s firm are more commonly owned by the same set of investors.
– – Coverage by HLS CorpGov, ProMarket (1), ProMarket (2), Bloomberg, Equitable Growth.
Working Paper, 2016 August.
Comovement: Evidence from the CDS Market (with Dan Bergstresser). We show that there is excess comovement in the CDS market caused by common dealers.
Working Paper, 2013.
Cash-flow Driven Covariation. The excess comovement observed in S\&P500 additions is not only due to behavioral reasons but mainly an anticipation effect from fundamental reasons.
Working Paper, 2013.