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There is this huge growth in passive investing. If investors are passive, this shouldn't have any implications for the cross-section/time-series of asset prices, i.e. no real economic effects.

Any references?

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There is an influential paper by Gormley et al. on this topic called "Passive investors, not passive owners"

Also a new working paper by Heath et al. "Do index funds monitor?", which used to be called "Passive investors are passive monitors."

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