Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/149265
Authors: 
Antón, Miguel
Ederer, Florian
Giné, Mireia
Schmalz, Martin C.
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 6178
Abstract: 
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.
Subjects: 
common ownership
competition
incentives
executive pay
JEL: 
G30
G32
D21
J31
J41
Document Type: 
Working Paper

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