The thesis is ~ that just having the same inactive institutional investors owning shares in competing companies discourages competition and hurts consumers.<p>I highly recommend reading the conclusion -- some excerpts/context:
"Consolidation in the asset management industry has potentially large anti-competitive effects, even compared to mergers of natural competitors in the product market itself. "<p>"Consistent with investors’ economic incentives and established economic theory, we find that when firms don’t have incentives to compete, they don’t. Specifically, we use more than 10 years of market-firm-level panel data from the airline industry to show that common ownership has a large and significant positive effect on product prices."<p>This is fascinating, especially in light of the analysis of "The Network of Global Corporate [Ownership]" <a href="http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0025995" rel="nofollow">http://journals.plos.org/plosone/article?id=10.1371/journal....</a> -- it explores the graph/structure of ownership among the largest organizations.