Thread by @lewis_crofts

StateStreet, Vanguard, BlackRock et al will be nervy. After US research flagged "common shareholdings" in, e.g., airlines might reduce competition, the EU scratched its head & then produced its own research by inhouse science wonks. publications.jrc.ec.europa.eu/repository/bit… It's inconclusive /1

1st, they'll be nervy about being in spotlight at all. It's rare for @EU_Competition to take a step like this. Clear sign that they're on the radar, and EU looking for evidence of how European markets might be affected. Picks sectors such as drinks, oil, electricity, telco /2

But, while the report says common shareholdings are on the rise and can lead to markups, it basically says it's difficult to draw a causal link with competition on the market. There are a load of different factors that play in to that. /3

Key quote: "“Our results would appear to suggest a positive association between common shareholding and the market power of firms. However, the findings of this study should be treated with caution." So, that'll be some relief to the big investors. Yep, this is bloody tricky. /4

But the fact that this has caught the regulator's eye... and it has been flagged in recent merger reviews (e.g. Dow, Dupont) means this debate will rage on for a bit. The report ends with the all-time classic conclusion: Someone really should do more research in this field. /end