Monteiro and Miranda (2022) argue that owners differ in their ability to select and work within a particular institutional environment, suggesting “institutional competence” as a dimension of ownership competence distinct from what we call governance, matching, and timing competence. We agree that institutions matter and welcome the chance to describe their role in detail. However, rather than treating institutional competence as a separate channel by which owners create value from their assets, we think institutional features can be modeled as “shift parameters” that moderate the effect of ownership competencies on outcomes. In developing this argument we reflect more broadly on the interplay between ownership competence and institutional uncertainty, noting that society at large benefits from individual-level ownership competence, ownership by some owners may cause harm to other owners, and property-rights enforcement and ownership competence are complements in generating private and societal benefits.
