The article in The Atlantic also references work by José Azar. His home page is here (but some papers are behind pay walls, though his PhD thesis is not): https://sites.google.com/site/joseazar/
Partnoy claims that the implication is a transfer of wealth from consumers (everyone) to shareholders (mainly upper middle to plutocrat class), although he notes that the index funds that he partly blames for this phenomenon transfer wealth downward from the Wall Street banker class to other shareholders including the upper middle class.
The premise that public companies are engaged in fierce competition is highly questionable. Don't all owners essentially aspire to be monopolists? I am not certain that public companies generally look to compete with one another. Some do, of course, but more often they look for niches in which they will not be competing with one another, or will be competing with few enough of the others that tacit price-fixing is possible without leaving any fingerprints. And if they can't do that, they eliminate competition by acquiring one another, which is the main way they deal with non-public competitors.
Except for a couple of recent things, index fund investors and other passive investors do little or nothing to influence management. Given that, and given that management almost always has incentive compensation that is maximized by outperforming industry rivals (or supposed rivals, see #1), it seems far-fetched to assume that management will act in shareholders' interest when that interest is contrary to their own. Lord knows, it's hard enough (maybe impossible) to get them to do that when shareholders' interests are clear and the shareholders are advocating for them. It's beyond imagining that anyone will ever say, "Let's not increase the value of this company 20% because it will decrease the value of another company 30%, and x% of our shareholders own y% of that other company," without the shareholders threatening, credibly, to fire them if they don't do that.
Let's assume that a majority of every company's stock is owned by essentially passive portfolio investors who are equally invested in the shares of every significant company in the relevant industry. How much of the stock needs to be owned by active traders/stock-pickers in order for management to have a clear incentive to compete if that's going to be profitable? 10%? 20%? It isn't much.