The proposal consisted of five strands. The first three purporting to study the effect of changes of the market structure of the investment industry and ownership structure of firms on: i) market power in product markets; ii) investment and innovation incentives in the presence of technological spillovers among firms; and iii) aggregate output, investment, labor supply and income distribution. Those strands have generated several important results. In strands i) and iii) a tractable general equilibrium model of oligopoly has been developed which explains how an increase in effective concentration in the market (which accounts for the increase in common ownership) yields lower real wages, employment, and a depressed economy. Furthermore, it is shown how intra-industry common ownership has a depressing effect on the economy while economy-wide common ownership (diversification) may be pro-competitive. In strand ii) it has been established that common ownership may help internalize technological spillovers in an industry and how higher levels of common ownership may be allowed in less concentrated markets from a welfare point of view. Regarding strand (iv), the anti-competitive influence of intra-industry common ownership and the pro-competitive one of inter-industry common ownership has been tested satisfactorily in the airline industry, and the link between the diversification of investors, common ownership pricing incentives and mark ups has also been established in a cross-section of US industries. Strand (v) dealt with the antitrust implications of the results which have been incorporated in the produced papers pointing at the limitations of the classical competition policy analysis which only centers in the consequences of competition for consumer surplus.
Overall, the picture that emerges from the study is that ownership structure (be it in the form of common ownership or cross-ownership) matters for competition, innovation, and for macroeconomic performance. This has been established both theoretically and empirically. The results have been published in five top international journals and in three working papers (disseminated in international working paper series) which are being revised at present to be eventually published. The results of the project have been presented in 20 conferences, including 4 keynotes, and in seminars in 14 academic institutions. Furthermore, the results have also been disseminated in columns such as vox.eu as well as in lectures in graduate programs.
