Common Ownership Around the World

Abstract

We study common ownership in 49 countries from 2005 to 2019 and show that it is pervasive and rising around the world. However, despite this global growth, common ownership is still considerably lower in all countries compared to the United States. It is particularly high and growing rapidly among the largest firms, a trend observed across all countries and regions. The rise of common ownership stems not only from increased institutional investment but also from its growing concentration, a development in which the Big Three (BlackRock, Vanguard, State Street) play a dominant role, particularly in the United States. Although non-Big Three institutional investors remain important in other countries, the significant increase in common ownership in many countries is primarily attributable to the breadth, size, and growth of Big Three holdings. We also investigate how common ownership is related to legal, institutional, and market characteristics such as investor protection laws, competition laws, mandatory ESG disclosure, and labor market frictions across firms and countries. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

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