Question A:
The nature of the Trump administration's 'golden share' agreement with Nippon Steel over the acquisition of US Steel has been summarized on X by the US secretary of commerce: https://x.com/howardlutnick/status/1933924525265043774
The approval of Nippon Steel's acquisition of US Steel will be substantially positive for jobs and investment in the US steel industry.
Responses
Responses weighted by each expert's confidence
Question B:
Government power over an acquired company's operational and governance matters, as in the US government's golden share in US Steel, is a substantial constraint on effective management of the company.
Responses
Responses weighted by each expert's confidence
Question C:
The precedent of the golden share arrangement in the US Steel deal will be a substantial deterrent to foreign investors in American companies.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
 John Campbell |
Harvard | Bio/Vote History | ||
|
|
||||
 John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
|
Investment, yes. "Jobs" less clear. Nippon will obviously automate anything it can. And please, folks, it's not 1933. There is a 4% unemployment rate, and getting skilled manufacturing workers is really hard.
|
||||
 Francesca Cornelli |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
|
|
||||
 Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Wenxin Du |
HBS | Bio/Vote History | ||
|
|
||||
 Darrell Duffie |
Stanford | Bio/Vote History | ||
|
|
||||
 Janice Eberly |
Northwestern Kellogg | Bio/Vote History | ||
|
The underlying fundamentals of the industry are still challenging in the US and globally. It is difficult to see how new ownership is transformative.
|
||||
 Eugene Fama |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Xavier Gabaix |
Harvard | Did Not Answer | Bio/Vote History | |
|
|
||||
 Itay Goldstein |
UPenn Wharton | Did Not Answer | Bio/Vote History | |
|
|
||||
 John Graham |
Duke Fuqua | Bio/Vote History | ||
|
|
||||
 Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
|
It is unlikely "substantial".
|
||||
 Harrison Hong |
Columbia | Bio/Vote History | ||
|
|
||||
 Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
|
|
||||
 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
|
Better than not approving it.
|
||||
 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
In the sense that the firm will continue to operate and likely would have shrunk substantially or disappeared. The total number of workers involved relative to the full economy is peanuts.
-see background information here |
||||
 Ralph Koijen |
Chicago Booth | Did Not Answer | Bio/Vote History | |
|
|
||||
 Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
|
|
||||
 Andrew Lo |
MIT Sloan | Bio/Vote History | ||
|
Protectionism and subsidization of any industry generally makes them less competitive in the long run.
|
||||
 Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
|
|
||||
 Sydney Ludvigson |
NYU | Bio/Vote History | ||
|
|
||||
 Matteo Maggiori |
Stanford GSB | Did Not Answer | Bio/Vote History | |
|
|
||||
 Gregor Matvos |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
|
|
||||
 Tobias Moskowitz |
Yale School of Management | Bio/Vote History | ||
|
|
||||
 Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
|
While I am not an expert in the effects of mergers and acquisitions, the deal appears to involve a large investment by Nippon Steel into US Steel, as well as providing increased distribution and sale opportunities for US Steel.
|
||||
 Christine Parlour |
Berkeley Haas | Did Not Answer | Bio/Vote History | |
|
|
||||
 Thomas Philippon |
NYU Stern | Bio/Vote History | ||
|
|
||||
 Manju Puri |
Duke Fuqua | Did Not Answer | Bio/Vote History | |
|
|
||||
 Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
 Paola Sapienza |
Hoover Institution Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
 Amit Seru |
Stanford GSB | Bio/Vote History | ||
|
|
||||
 Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
 Laura Starks |
UT Austin McCombs | Did Not Answer | Bio/Vote History | |
|
|
||||
 Jeremy Stein |
Harvard | Bio/Vote History | ||
|
|
||||
 Johannes Stroebel |
NYU Stern | Did Not Answer | Bio/Vote History | |
|
|
||||
 Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
|
|
||||
 Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
|
substantial capital investment to preserve competitiveness; breathes new life into the plant and US steel sector
|
||||
 Toni Whited |
UMich Ross School | Bio/Vote History | ||
|
|
||||
Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
|
John Campbell |
Harvard | Bio/Vote History | ||
|
The experience of nationalized industries in the UK is a relevant analogy and makes me believe that government control will lead to politicized decisionmaking at U.S. Steel
|
||||
|
John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
|
You're putting it politely. A partially state owned company will do anything but run efficiently, guaranteeing generations of subsidized inefficiency in the face of a globally competitive industry. European 1950s socialism comes to the US.
|
||||
|
Francesca Cornelli |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Wenxin Du |
HBS | Bio/Vote History | ||
|
|
||||
|
Darrell Duffie |
Stanford | Bio/Vote History | ||
|
|
||||
|
Janice Eberly |
Northwestern Kellogg | Bio/Vote History | ||
|
The alternative - what Nippon Steel would do without the Golden Share - is hard to know. But the conditions and power of effectively having the government on the Board is a powerful force if wielded against effective management.
|
||||
|
Eugene Fama |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Xavier Gabaix |
Harvard | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Itay Goldstein |
UPenn Wharton | Did Not Answer | Bio/Vote History | |
|
|
||||
|
John Graham |
Duke Fuqua | Bio/Vote History | ||
|
|
||||
|
Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
|
The golden share will change management behavior. Of course, there are many other indirect ways that government constrains management via the regulations.
|
||||
|
Harrison Hong |
Columbia | Bio/Vote History | ||
|
|
||||
|
Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
|
|
||||
|
Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
|
It is a constraint that I would prefer not be there. Question is whether it is substantial.
|
||||
|
Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
Assuming it is used and it is hard to believe they would have negotiated so hard for control over various management options if they do plan to at least threaten to use it
|
||||
|
Ralph Koijen |
Chicago Booth | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
|
|
||||
|
Andrew Lo |
MIT Sloan | Bio/Vote History | ||
|
Government power, especially when abused to achieve non-commercial objectives that do not benefit long-term national interests, almost never ends well.
|
||||
|
Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
|
|
||||
|
Sydney Ludvigson |
NYU | Bio/Vote History | ||
|
|
||||
|
Matteo Maggiori |
Stanford GSB | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Gregor Matvos |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Tobias Moskowitz |
Yale School of Management | Bio/Vote History | ||
|
|
||||
|
Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
|
Controlling companies is much better done by clearly-specified laws and regulations than by government ownership and control. Historically, such companies have ended up being constrained to serve political agendas rather than profitability, efficiency, or national interests.
|
||||
|
Christine Parlour |
Berkeley Haas | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Thomas Philippon |
NYU Stern | Bio/Vote History | ||
|
|
||||
|
Manju Puri |
Duke Fuqua | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
|
Depends on what objective is but even threat of control should skew decision making.
|
||||
|
Paola Sapienza |
Hoover Institution Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Amit Seru |
Stanford GSB | Bio/Vote History | ||
|
|
||||
|
Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
|
Laura Starks |
UT Austin McCombs | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Jeremy Stein |
Harvard | Bio/Vote History | ||
|
|
||||
|
Johannes Stroebel |
NYU Stern | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
|
|
||||
|
Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
|
Generally not a good idea for government to meddle in corporate governance. This did not work well for many industries in the 1960s and 1970s. unclear how binding these constraints are, but constraints always reduce efficiency.
|
||||
|
Toni Whited |
UMich Ross School | Bio/Vote History | ||
|
|
||||
Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
|
John Campbell |
Harvard | Bio/Vote History | ||
|
The U.S. Steel has higher political sensitivity than many acquisitions do, so it's not clear how offputting the precedent will be.
|
||||
|
John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
|
This looks like a one-off for a politically sensitive basket case. I guess trying to buy Boeing wouldn't get far, but most foreign investment will be left alone.
|
||||
|
Francesca Cornelli |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Wenxin Du |
HBS | Bio/Vote History | ||
|
|
||||
|
Darrell Duffie |
Stanford | Bio/Vote History | ||
|
|
||||
|
Janice Eberly |
Northwestern Kellogg | Bio/Vote History | ||
|
There were already significant reviews for foreign investors in strategic US companies. This is an additional tool without guidelines or constraints to govern the rules of the road and allowing for on-going intervention even when an acquisition is approved.
|
||||
|
Eugene Fama |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Xavier Gabaix |
Harvard | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Itay Goldstein |
UPenn Wharton | Did Not Answer | Bio/Vote History | |
|
|
||||
|
John Graham |
Duke Fuqua | Bio/Vote History | ||
|
|
||||
|
Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
|
I believe it is a deterrent but it is unlikely a "substantial" deterrent.
|
||||
|
Harrison Hong |
Columbia | Bio/Vote History | ||
|
|
||||
|
Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
|
|
||||
|
Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
|
Guessing that this is unusual, but uncertain.
|
||||
|
Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
Over the medium term, assuming that by then that US Steel is pressured to do something that management would have not chosen to do.
|
||||
|
Ralph Koijen |
Chicago Booth | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
|
|
||||
|
Andrew Lo |
MIT Sloan | Bio/Vote History | ||
|
Unprecedented government interference in private-sector business negotiations reduce the economic value to foreign investors ceteris paribus, hence the demand for such opportunities should decline.
|
||||
|
Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
|
|
||||
|
Sydney Ludvigson |
NYU | Bio/Vote History | ||
|
|
||||
|
Matteo Maggiori |
Stanford GSB | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Gregor Matvos |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Tobias Moskowitz |
Yale School of Management | Bio/Vote History | ||
|
|
||||
|
Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
|
At least it was not expropriation.
|
||||
|
Christine Parlour |
Berkeley Haas | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Thomas Philippon |
NYU Stern | Bio/Vote History | ||
|
|
||||
|
Manju Puri |
Duke Fuqua | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
|
|
||||
|
Paola Sapienza |
Hoover Institution Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Amit Seru |
Stanford GSB | Bio/Vote History | ||
|
|
||||
|
Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
|
Evidently it was not a substantial deterrent to Nippon, anyway, given that it seems not to have affected the offer price.
|
||||
|
Laura Starks |
UT Austin McCombs | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Jeremy Stein |
Harvard | Bio/Vote History | ||
|
|
||||
|
Johannes Stroebel |
NYU Stern | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
|
|
||||
|
Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
|
Foreign capital providers will think twice about exposing themselves to government intervention like the golden share deal.
|
||||
|
Toni Whited |
UMich Ross School | Bio/Vote History | ||
|
|
||||
