Shareholders
Will “Portfolio Primacy” Throw a Monkey Wrench in Elon Musk’s Plans to Acquire Twitter?
The SEC's definition of fiduciary duty allows institutional shareholders to vote against Elon Musk's Twitter takeover bid thanks to portfolio primacy.
Nobel Laureate Oliver Hart on Empowering Twitter’s Shareholders
In an interview with ProMarket, Nobel laureate Oliver Hart explains why broadening our perspective on fiduciary duty beyond maximizing shareholder wealth could...
Are Large Institutional Investors Actually Effective in Getting Companies to Reduce Their CO2 Emissions?
Large institutional investors have been accused of not doing
enough to reduce CO2 emissions. However, a new study finds that firms like
BlackRock, Vanguard,...
President-Elect Joe Biden and the Real Lessons of DuPont
Simply talking corporate America into being more responsible is not enough. It may get corporations to talk the talk, but not to...
It is Not Just Small Investors Who Will Be Silenced Thanks to SEC’s New Rules
Shareholder proposals are one of the most effective forms of shareholder voice in corporate America. It is one of the main channels...
Beyond Friedman’s Doctrine: The True Purpose of the Business Corporation
The pandemic and the renewed focus on inequality and injustice arising in the wake of the death of George Floyd have accelerated...
Market Forces Already Address ESG Issues and the Issues Raised by Stakeholder Capitalism
When do market forces push firms toward stakeholder goals, rather than just shareholder goals? When do market forces push firms toward ESG...
Missing in Today’s Shareholder Value Maximization Credo: The Shareholders
Today’s corporate world is very different from the one Milton Friedman wrote in. In a world where the question of whether managers...
Serving Shareholders Doesn’t Mean Putting Profit Above All Else
The time has come for companies, economists, and society to abandon the argument that the only responsibility of business is to maximize profits.
Editor’s note:...
Friedman’s Principle, 50 Years Later
In the mid-1980s, Milton Friedman’s view that the only social responsibility of business is to increase its profits became dominant in business...
LATEST NEWS
Antitrust and Competition
Revising Guideline 6 With Evidence To Establish a Structural Inference for Input Foreclosure
Vertical merger law lacks the structural presumption of horizontal merger law, which shifts the burden from the government to the merging parties to provide evidence that a merger will not produce anticompetitive effects when it is known that the merger will substantially increase market concentration. To improve Guideline 6 of the draft Merger Guidelines concerning vertical foreclosure, Steven Salop develops a three-factor criteria with which the government antitrust agencies can show an analogous structural “inference” that shifts the burden of evidence to the merging parties.
Antitrust and Competition
How US Antitrust Enforcement Against Xerox Promoted Innovation by Japanese Competitors
Xerox invented modern copier technology and was so successful that its brand name became a verb. In 1972, U.S. antitrust authorities charged Xerox with monopolization and eventually ordered the licensing of all its copier-related patents. As new research by Robin Mamrak shows, this antitrust intervention promoted subsequent innovation in the copier industry, but only among Japanese competitors. Nevertheless, their innovations benefited U.S. consumers.
Antitrust and Competition
Revising the Merger Guidelines To Return Antitrust to a Sound Economic and Legal Foundation
The draft Merger Guidelines largely replace the consumer welfare standard of the Chicago School with the lessening of competition principle found in the 1914 Clayton Act. This shift would enable the Federal Trade Commission and Department of Justice Antitrust Division to utilize the full extent of modern economics to respond to rising concentration and its harmful effects, writes John Kwoka.
Economic History
How Anthony Downs’s Analysis Explains Rational Voters’ Preferences for Populism
In new research, Cyril Hédoin and Alexandre Chirat use the rational-choice theory of economist Anthony Downs to explain how populism rationally arises to challenge established institutions of liberal democracy.
Antitrust and Competition
The Impact of Large Institutional Investors on Innovation Is Not as Positive as One Might Expect
In a new paper, Bing Guo, Dennis C. Hutschenreiter, David Pérez-Castrillo, and Anna Toldrà-Simats study how large institutional investors impact firm innovation. The authors find that large institutional investors encourage internal research and development but discourage firm acquisitions that would add patents and knowledge to their firms’ portfolios, hampering overall innovation.
