Non-controlling minority shareholdings and collusion
CITATION: De Haas, S. & Paha, J. 2020. Non-controlling minority shareholdings and collusion. Review of Industrial Organization, 58:431–454, doi:10.1007/s11151-020-09758-y.
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Article
This article merges theoretical literature on non-controlling minority shareholdings (NCMS) in a coherent model to study the effects of NCMS on competition and collusion. The model encompasses both the case of a common owner holding shares of rival firms as well as the case of cross ownership among rivals. We find that by softening competition, NCMS weaken the sustainability of collusion under a greater variety of situations than was indicated by earlier literature. Such effects exist, in particular, in the presence of an effective competition authority.