AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Common Ownership and Entrepreneurship
AEA Papers and Proceedings
vol. 111,
May 2021
(pp. 582–86)
Abstract
We complement the literature on common ownership by presenting two new observations from entrepreneurial start-ups. First, given the increase in common ownership of start-ups by venture capital investors, inclusion of high-value start-ups in standard common ownership measures may actually increase aggregate measures of common ownership. Second, we suggest that even if public-firm common ownership leads to collusive inefficiency and higher prices in the short term, it may also create opportunities for entry of innovative high-growth start-ups. Consistent with this, we document that entrepreneurial activity and common ownership of start-ups tends to be higher in industries with higher common ownership among public firms.Citation
Eldar, Ofer, and Jillian Grennan. 2021. "Common Ownership and Entrepreneurship." AEA Papers and Proceedings, 111: 582–86. DOI: 10.1257/pandp.20211120Additional Materials
JEL Classification
- L26 Entrepreneurship
- M13 New Firms; Startups
- G32 Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G24 Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies