July 18, 2017

Brattle Economists Author Law360 Article on Proposed Remedies to Horizontal Shareholding

Brattle economists Elaine Buckberg, Steven Herscovici, James Reitzes, and Branko Jovanovic have authored a Law360 article addressing claims from recent studies that competition is adversely affected when “institutional investors hold significant shares in multiple firms within a ‘concentrated’ industry.”

In the article, “Proposal to Remedy Horizontal Shareholding is Flawed,” the authors evaluate a proposed remedy that would allow investors to hold shares in one company in a concentrated industry, or limit their shareholdings to no more than one percent of the industry.

Furthermore, the authors believe the proposed remedy would place increased burdens on investors, financial advisers, and intermediaries; raise transaction costs; and possibly force funds to hold more short-term assets while impairing many households’ ability to accomplish long term financial goals.

The authors acknowledge that further research is needed to determine whether common ownership results in anticompetitive behavior in certain industries. However, even if that proves out, policy makers should seek a remedy that mitigates anticompetitive behavior while minimizing the costs associated with achieving efficiency-enhancing investment objectives. The proposed remedy does not meet those standards.

The full article can be downloaded using the link below.

Associated Experts
Buckberg search v2
Principal
+1.202.955.5050
Dr. Buckberg provides consulting services and testimony in litigation and regulatory disputes in finance, complex commercial litigation, and bankruptcy and advises parties in public-private partnerships for infrastructure investment. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Herscovici 087
Principal
Dr. Herscovici specializes in the application of economics, finance, and data analysis to litigation and other complex business issues. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Reitzes 067
Principal
(Washington) +1.202.955.5050
(Toronto) +1.416.644.8877
Dr. Reitzes, a former Federal Trade Commission economist, specializes in antitrust and regulatory economics. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4
Branko bio 2
Senior Consultant
Branko Jovanovic specializes in providing economic analysis and expert testimony in the areas of securities and finance, and consumer protection across a wide range of industries. More icon f02782c24cccaf6d90e1da53920c42f20e5a8955f54ac2ca5727ec7dc89987b4