Assistant Professor of Finance, McMaster University, DeGroote School of Business
  • Who is afraid of BlackRock?

    Yan Wang    Massimo Massa, David Schumacher
    26 Jun 2018

    This paper has won the Best Paper Award in Investments in FMA Asia Pacific Conference 2018 in Hong Kong. This award is sponsored by CFA Institute. See web page:

    In this paper, we use the merger of BlackRock with Barclays Global Investors to study how changes in ownership concentration affect the investment behavior of financial institutions and the cross-section of stocks worldwide. We find that other institutions begin avoiding stocks that experience a merger-related increase in ownership concentration. As a result, affected stocks experience a permanent and negative price, liquidity and volatility impact. We confirm these effects in a large sample of asset management mergers over a ten year period. The interpretation that institutions strategically avoid stocks with an elevated risk of future fragility enjoys the strongest support in the data.