Can Institutional Investors Soften Downstream Product Market Competition?

By John R. Woodbury

The recent findings of leading antitrust authors are certainly intriguing and have spawned a debate on the competitive significance of the actions of institutional investors. There should be little doubt that further research should be pursued by these and other researchers to validate (or not) the anticompetitive effect and the generality of that effect of shareholdings by institutional investors. If that effect is robust, it would justify significant changes in policy. But is it premature and potentially very costly to do so without further evidence?