The Growing Problem of Horizontal Shareholding

By Einer Elhauge –

Horizontal competitors increasingly have the same leading shareholders, bringing on the potential for anticompetitive effects. Those effects could help explain economic puzzles like the use of inefficient methods of executive compensation and the growing gap between corporate profits and investment. Recently, the evidence has gotten even stronger, showing that horizontal shareholding has continued to grow and is directly linked to inefficient executive compensation and the corporate profit-investment gap.

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