Common Ownership Around the World

Common ownership describes a situation whereby the same investors hold significant stakes in multiple competing firms. Over the last few decades it has become a defining feature of modern capital markets. Its growth has sparked an important debate among academics, regulators, and policymakers about its potential implications for competition and corporate governance.

In our new working paper “Common Ownership Around the World,” we provide the first systematic, global analysis of this trend. Using a novel dataset covering 49 countries and more than 60,000 publicly listed firms from 2005 to 2019, we document the global rise in common ownership and explore its key drivers. While common ownership is increasing across the globe, the United States remains a clear outlier in both the level and concentration of such ownership.

A Global Trend with U.S. Leadership

Our study shows that common ownership is now a global phenomenon. In the median country, the average measure of overlapping ownership (κ) more than doubled between 2005 and 2019. However, the U.S. stands far above all others: its average common ownership intensity is nearly twice as high as the next highest country. This U.S. dominance is not only due to higher institutional investment but also to greater concentration among asset managers. Notably, this pattern persists even when adjusting for firm size and industry, indicating that the U.S. is structurally distinct in its ownership architecture.

The increase in common ownership is especially pronounced among the largest firms in every country. Across regions, firms in the top tercile of the market capitalization distribution have approximately three times the level of common ownership of the median firm. This concentration means that common ownership is most intense precisely where market power and competitive dynamics are likely most consequential. In fact, in the U.S., common ownership levels among top-tercile firms are on par with those observed among S&P 500 constituents, suggesting that the trend is particularly pronounced at the upper end of the firm size distribution.

The Role of the Big Three

One of the most striking findings is the central role played by the “Big Three” asset managers—BlackRock, Vanguard, and State Street. In the U.S., these firms have become the largest shareholders in nearly 40% of all public companies, up from just 3% in 2005. Their rise accounts for a significant share of the growth in common ownership, both domestically and globally. This rise reflects both their growing assets under management and the increased popularity of passive index investing.

Outside the U.S., the Big Three are less dominant but still exert significant influence. Their expansive portfolios, even with modest individual stakes, contribute meaningfully to rising common ownership in countries such as the UK, Germany, and Japan. In many developed markets, they appear among the top five shareholders in a growing number of firms. Despite holding relatively small average stakes outside the U.S., their extensive coverage of firms leads to considerable overlap and hence to an increase in aggregate common ownership levels.

It is important to underscore that common ownership does not necessarily imply coordinated behavior. However, the widespread presence of these asset managers across many firms and industries has sparked concerns that their voting power or corporate influence might have indirect effects on firm behavior, especially in concentrated industries.

Institutional and Legal Drivers

We examine how legal and institutional environments affect common ownership. Strong investor protections are associated with higher common ownership, likely because they encourage more dispersed, overlapping investment. In contrast, strict labor protections are linked to lower common ownership, perhaps because they limit investor control over workforce decisions or reflect more concentrated ownership structures. These relationships highlight how corporate governance frameworks can shape capital market structures.

Interestingly, we find suggesting evidence that stronger antitrust enforcement correlates with lower common ownership. This suggests that competition policy may influence the structure of capital markets. In countries with more stringent merger control laws and more robust competition enforcement, common ownership tends to be lower. This pattern may reflect either regulatory scrutiny discouraging overlapping ownership or structural features that favor more atomistic ownership.

We also observe that in countries with high barriers to entry (e.g., complex regulations for starting a business), common ownership tends to be higher, possibly because the presence of fewer entrants means more concentrated investment in incumbents. Conversely, where entry is easier, investors have more choices and capital tends to be less concentrated.

Mandatory ESG disclosure rules, when government-imposed, are associated with slightly lower levels of common ownership, potentially due to shifts in investor preferences or compliance costs. Government-led mandates appear to have stronger effects than those introduced by stock exchanges, possibly due to higher credibility or enforcement. Political stability and regulatory quality also play a role: countries with weaker governance tend to have higher common ownership, possibly due to firms consolidating control amid regulatory uncertainty.

Implications for Policy

Our findings have several implications for policymakers. First, the prevalence of common ownership globally means that potential anticompetitive effects are not limited to the U.S. While the U.S. remains an extreme case, many countries are on a similar trajectory. Second, given that common ownership is concentrated in the largest firms, its effects may be most pronounced in industries dominated by a few major players which is precisely where competition concerns are already heightened.

Third, the rise of passive index investing (particularly through the Big Three) is driving this trend. As these investors continue to accumulate stakes across markets, understanding their influence on competition, governance, and market outcomes becomes increasingly urgent. Although individual ownership stakes may be small, their ubiquity across portfolios creates complex incentives and governance challenges.

Fourth, our work suggests that legal and institutional frameworks can moderate or amplify the rise of common ownership. Regulators should consider these factors when designing policies to preserve competition and protect investors. For example, antitrust agencies may want to incorporate common ownership considerations into merger review processes or explore whether existing tools are sufficient for addressing coordination risks stemming from shared investors.

Finally, it is worth considering that the effects of common ownership may vary across contexts. In some settings, overlapping ownership might lead to passive governance or muted competition; in others, it may facilitate long-term stewardship or internalization of externalities. Future research is needed to disentangle these possibilities and assess when common ownership is harmful, benign, or even beneficial.

To explore our findings in more detail, including global maps and firm-level analyses, see the paper here.