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The effect of Common Ownership and Input-Output networks: the case of the Spanish Economy

Author

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  • Matteo Bizzarri

    (Università di Napoli Federico II, Napoli, Italy)

  • Fernando Vega-Redondo

    (The Chinese University of Hong Kong, Hong Kong)

Abstract

We quantify a parsimonious model of oligopolistic competition with common ownership in input–output networks. Using Spanish data on demand, ownership, and input–output linkages, we estimate the overall welfare effect of common ownership. Input–output linkages introduce a theoretical channel through which common ownership could improve welfare. We find that this channel exists but is not strong enough to offset the reduction in competition: common ownership has a negative welfare effect, though weaker than in the absence of input–output linkages. Finally, we introduce a parameterized ownership separation to compute a firm-level index of the anti-competitiveness of common ownership.

Suggested Citation

  • Matteo Bizzarri & Fernando Vega-Redondo, 2025. "The effect of Common Ownership and Input-Output networks: the case of the Spanish Economy," Working Papers 25-05, NET Institute.
    • Handle: RePEc:net:wpaper:25-05
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    References listed on IDEAS

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    1. José Azar & Martin C. Schmalz & Isabel Tecu, 2018. "Anticompetitive Effects of Common Ownership," Journal of Finance, American Finance Association, vol. 73(4), pages 1513-1565, August.
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    Keywords

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    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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