UC Berkeley

Many natural competitors are co-owned by a small number of large institutional investors. While concerns about the anticompetitive potential of common ownership are growing, empirical evidence on its impact remains mixed. This study examines whether common ownership shapes whom firms internally assess as competitors. Internally assessed competitors reflect firms’ attention allocation and reveal their strategic focus in investment and operational decisions. Using scraped data on named competitors disclosed in the Competition sections of 10-K filings from 1995 to 2023, I track how these relationships evolve over time. I first validate that competitor removals capture meaningful shifts by showing that they coincide with real changes in competitive interactions. Building on this validation, I use associational analyses and a difference-in-differences design leveraging exogenous institutional mergers to show that greater ownership overlap increases the likelihood that firms remove commonly owned peers from their internally assessed competitor lists. Collectively, these findings offer new insights into antitrust debates on common ownership and demonstrate the importance of perceived competitive relations.