Economics Research Seminar
Common Ownership, Competition, and Top Management Incentives
Sponsored by: Economics Department
Speaker(s): Florian Ederer, Ph.D., Yale University
Date & Time: Monday, Nov. 14 from 10 a.m. to 11:30 a.m. (Eastern)
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 firms are more commonly owned by the same set of investors. Higher common ownership also leads to higher unconditional total pay. We exploit quasi-exogenous variation in common ownership from a mutual fund trading scandal to support a causal interpretation. These findings challenge conventional assumptions in the corporate finance literature about the objective function of the firm.
Please join the Economics Department for a research seminar. This event is open to all Case Western Reserve University faculty, Ph.D. students, economic majors and minors, and those interested in economics research.
Peter B. Lewis Building, Room 118
11119 Bellflower Road
Cleveland, OH 44106-7235