2017-11-27 07:39:00 Mon ET
stock market gold oil stock return s&p 500 asset market stabilization asset price fluctuations stocks bonds currencies commodities funds term spreads credit spreads fair value spreads asset investments
Is it anti-competitive and illegal for passive indexers and mutual funds to place large stock bets in specific industries with high market concentration? Harvard law professor Einer Elhauge suggests that it is illegal for a passive institutional investor to buy-and-hold large equity stakes in a less competitive industry with high concentration, such as the U.S. airlines industry with 4 or fewer key players. In contrast, passive indexers would be safe from antitrust concerns if most other institutional investors stop buying multiple public companies in a specific sector with high market concentration.
The basic rationale relates to the fact that if institutional investors such as index funds and mutual funds hold shares of multiple companies in a specific industry, these oligopolistic firms would tend to compete less vigorously with one another. When senior executives make business decisions in the best interests of their institutional investors, this logic suggests less fierce product market competition and greater price discrimination for consumers in addition to the private benefits of portfolio diversification. The net result would be more stable share prices and more favorable rents and returns to these passive indexers and mutual funds.
Although key critics may disagree with this novel thesis, it is quite controversial to judge whether it is legal for institutional investors to retain major equity stakes in oligopolistic firms in a given industry with high market concentration.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2018-12-17 08:43:00 Monday ET

Apple files an appeal to overturn the recent iPhone sales ban in China due to its patent infringement of Qualcomm proprietary technology. This recent ban of
2027-10-31 00:00:00 Sunday ET

In the technological race between the U.S. and China, America leads in some strategic sectors from AI large language models (LLM), graphics processing units
2019-02-13 11:00:00 Wednesday ET

President Trump may reluctantly sign the congressional border wall deal in order to avert another U.S. government shutdown. With his executive power to decl
2020-06-17 09:23:00 Wednesday ET

Successful founders focus on their continuous growth, passion, perseverance, and the collective wisdom of most team members. William Ferguson (2013) &
2021-07-07 05:22:00 Wednesday ET

What are the best online stock market investment tools? Stock trading has seen an explosion since the start of the pandemic. As people lost their jobs an
2018-07-13 09:41:00 Friday ET

Yale economist Stephen Roach warns that America has much to lose from the current trade war with China for a few reasons. First, America is highly dependent