Business Commons^™

Growing The Asset Management Franchise: Evidence From Hedge Fund Firms, William Fung, David Hsieh, Narayan Y. Naik, Melvyn Teo

Research Collection Lee Kong Chian School Of Business

We investigate the growth strategies of hedge fund firms. We find that firms with successful first funds are able to launch follow-on funds that charge higher performance fees, set more onerous redemption terms, and attract greater inflows. While first funds outperform follow-on funds, the superior performance of the former attenuates following the launch of the second fund. Multiple-product firms underperform single-product firms, but harvest greater fee revenues. Consequently, the multiple-product firm has become the dominant business model in the hedge fund industry.

Does Analyst Experience Affect Their Understanding Of Non-Financial Information? An Analysis Of The Relation Between Patent Information And Analyst Forecast Errors, Taiwhun Taylor Joo

Graduate Theses and Dissertations

This study examines whether analyst experience affects the relation between patent information and analyst forecast errors. U.S. Generally Accepted Accounting Principles require that firms expense all in-house research and development (R&D) costs. This means that even when R&D activities produce intangible assets with future economic benefits, firms cannot capitalize R&D costs as assets. Consequently, financial statements are largely deficient in the information they provide regarding the output of R&D activities. However, patent information is one type of non-financial information about R&D output that is publicly available.

Using updated patent data, I confirm the results of prior studies that find a …

High School Seniors' Financial Knowledge: The Impact Of Financial Literacy Classes And Developmental Assets, Kathy Ngoc Nguyen

Graduate Theses and Dissertations

Low levels of financial literacy among high school students are a growing concern in the United States. High school students lack the financial knowledge to make important financial decisions. Financial literacy and money management skills are important for high school students as they transition into an ever-changing economy. High school students, who are financially literate, are likely to develop positive financial behaviors and make positive financial decisions. Previous studies show that financial literacy classes can increase financial knowledge.

The present study has three objectives. First, this study examined whether the Money Management Skills for Young Adults Class increased high school …

Broker Vs. Advisor, Steven D. Dolvin

All Chapters

Over the past decade, more retail investment professionals have transitioned away from a pure broker relationship to a more advisory role. This switch is potentially good for both sides, as it reduces the incentive to churn (i.e., excessively trade) an account simply to generate commissions, while also providing a more stable revenue for the advisor. See article here, Financial-Planning.com.

Market Timing Vs. Market Efficiency, Steven D. Dolvin

All Chapters

Market timers may occasionally be correct, but it takes more than a few right calls to beat the market over the long term. In reality, this continued success is virtually impossible. See the article here, Wall Street Journal.

Municipal Bond Risk -- Detroit, Steven D. Dolvin

All Chapters

Municipal bonds usually have a lower yield to maturity than comparable US Treasury bonds. While this would normally be indicative of lower risk, it is purely a function of the tax advantages they provide. However, as the recent Detroit, MI bankruptcy filing suggests, municipals do indeed carry higher risk. (See article here, Yahoo! Finance.)

An Introduction To Financial Analysis, Annetta M. Gibson

Faculty Publications

Presentation for Treasurers, Euro-Asia Division, July 18, 2013.

Ipo Advice, Steven D. Dolvin

All Chapters

IPOs generally experience a positive first day return, so-called underpricing. However, this return primarily accrues to those who are fortunate enough to receive an allocation of shares at the offer price. A recent article in the Wall Street Journal provides some advice for those interested in investing in IPOs. See the article here.

Women As Leaders In Differing Microfinance Models, Rae M. Randleman

Journal of Interdisciplinary Feminist Thought

One of the original microfinance institutions (MFIs) is Grameen Bank in Bangladesh and the founder of the bank is Muhammad Yunus (2007). Yunus (2007) initiated a discourse that stated that microloans granted to women resulted in, among other things, increased female empowerment. Much of the global microfinance industry (MFI) has mimicked Yunus’ focus on women and thus created a global master narrative which stated that the capitalist system of credit provided to marginalized women can alleviate poverty and empower women. Other development organizations contend that by itself microfinance cannot empower women; empowerment also requires long-term efforts to influence change in …

Financial Literacy And Retirement Planning In Australia, Julie R. Agnew, Hazel Bateman, Susan Thorp

Numeracy

Financial literacy and numeracy are closely tied. Furthermore, financial literacy has been shown to relate to important financial behaviors. This study examines the relationship between financial literacy and retirement planning using a measure that includes questions requiring numeracy. We implement a customized survey to a representative sample of 1,024 Australians. Overall, we find aggregate levels of financial literacy similar to comparable countries with the young, least educated, those not employed, and those not in the labor force most at risk. Our financial literacy measure is positively related to retirement planning in our sample.

The Performance Of Listed Hedge Fund Firms, Lin Sun, Melvyn Teo

Research Collection BNP Paribas Hedge Fund Centre

We examine the impact of fund management company listing on hedge fund performance. We find that hedge funds managed by listed firms underperform those managed by unlisted firms by 1.89 per annum after adjusting for risk. Using an event study framework, we show that hedge fund performance deteriorates from 10.32 percent per year in the 36-month pre-listing window to 2.16 percent per year in the 36-month post-listing window. Over the same period, firm assets under management effectively double from US$1.54bn to US$3.04bn. There is no evidence to suggest that funds managed by listed firms are better able to manage operational …

Inayat U. Mangla, Haenicke Instititue For Global Education

International Faculty Researchers

Captivated by the economic culture he encountered in the mid-1970s while studying in the United States as a Fulbright Scholar, Dr. Inayat U. Mangla, a native of Lahore, Pakistan, joined Western Michigan University’s faculty in 1985 and has become an internationally recognized expert on global financial markets.

Two Essays On Ceo Inside Debt Compensation, Nilakshi Borah

Doctoral Dissertations

In the first chapter, I examine the effect CEO inside debt holdings on firm cash holdings, as measured by the ratio of cash and marketable securities to net assets using a sample of EXECUCOMP firms over the period of 2006 to 2008. Following prior literature on CEO inside debt holdings (Cassell et al., 2012), I use the following two measures as proxies for CEO inside debt compensation: (1) the CEO to firm debt/equity ratio, which is calculated as the CEO's debt/equity ratio scaled by the firm's debt to equity ratio and 2) an indicator variable equal to one when the …

The Influence Of Director Stock Ownership And Board Discussion Transparency On Financial Reporting Quality, Jacob M. Rose, Cheri Mazza, Carolyn S. Norman, Anna M. Rose

WCBT Faculty Publications

Seventy-two active corporate directors participate in an experiment where management insists on aggressive recognition of revenue, but the chief audit executive proposes a more conservative approach. Results indicate interactive effects of director stock ownership and the transparency of director decisions. Stock-owning directors are more likely to oppose management’s attempts to manage earnings when transparency increases. For non-stock owning directors, however, increasing transparency does not affect the likelihood that directors oppose management’s attempts to manage earnings. The current study challenges suppositions that equate director stock ownership with improved financial reporting and higher corporate governance quality, and it provides evidence that increased …

Tax Increment Financing Trends In Southern Maine 2001-2011, Kevin Price

Muskie School Capstones and Dissertations

Tax Increment Financing (TIF) is an economic development tool authorized for use in 49 states and the District of Columbia. TIFs are a very popular economic development tool that allow for a low-cost way to fund development projects. A TIF is designed to turn an undesirable or underdeveloped area into a developed, revenue generating area. The restrictions as to the exact types of property that quality for TIF vary from state to state, but they generally are used to target underdeveloped areas to encourage growth. Maine places several limitations on TIFs including acreage caps, a value cap, a municipal indebtedness …

Editor's Note, Marites Tiongco

DLSU Business & Economics Review

No abstract provided.

The Contributors, Marites Tiongco

DLSU Business & Economics Review

No abstract provided.

A Cut From Above: The Impact Of Loyalty Program Status On Member’S Behavior, Fredelita Espiritu-De Mesa

DLSU Business & Economics Review

This study identified the differences on the behavior between elite and non-elite members of a loyalty program. Behaviors measured were personal referrals, personal information sharing, openness to store promotions, increasing purchases, and marketing research support. Results showed the significant differences on behavior such as personal referrals and increasing purchases. The store benefits personal referrals from the non-elite members while increasing purchases from elite members.

Consumption Pattern Of Poor Households In Metro Manila – A Microeconometric Evaluation, Cesar C. Rufino

DLSU Business & Economics Review

This study is an attempt to analyze through survey design-consistent consumption profiling the budget allocation pattern of urban poor in Metro Manila. Econometric models of a complete system of Engel curves for the various consumption items are to be employed in the analysis. A value-added characteristic of this research is the incorporation of the complex survey design features of the 2009 Family Income and Expenditure Survey to produce consistent and unbiased standard errors and parameter estimates used in a variety of inferences implemented.

South Koreans Studying In Dlsu-Manila: Challenges And Opportunities In Trade In Education Services, Luz Suplico-Jeong, Rechel G. Arcilla

DLSU Business & Economics Review

Trade in education services plays a crucial role in economies like Australia, Canada, New Zealand, UK, and USA. The largest component of trade in education services consists of students who travel abroad to study. This market is going to grow as international student mobility continues to increase. The Philippines has been a popular destination for South Korean students who want to study abroad because English is widely spoken. It offers the same quality of English education at a lower cost. This paper examines the economic contribution and challenges of the South Korean students in the Philippines. A marketing strategy to …

Exploring Integrity, Leadership And Value Maximization In Microfinance, Junette A. Perez

DLSU Business & Economics Review

This study intends to review thoughts and expositions on integrity, leadership, and its potential link to value maximization in microfinance. The major source of exposition is from Jensen, Erhard, and Zaffron (2011). Prior reviews revealed that a man with integrity is a man of his word. As such, integrity begins with the mind as the mind compels the desire to exercise the manifestations of integrity. Jensen et al. (2011) measured integrity as equivalent to honoring one’s word. Applying such definition in microfinance, imputed with concepts of leadership with a view of maximizing value in microfinance is limitless as well as …

Impact Of Cooperative Finance On Household Income Generation, Onafowokan Onabanjo Oluyombo

DLSU Business & Economics Review

The study assesses the role played by cooperative societies’ loans services on members’ economic condition through household income generation in rural areas where there is no bank or other formal financial providers. Using a questionnaire technique, the study covers the activities of cooperative societies located in rural communities and villages outside the state capital and local government headquarters where there is no electricity, water, and tarred road in Ogun State, Nigeria. Data are analysed using chi-square, t-test, ANOVA, and effect size. The study found that participation in a cooperative is associated with increase in household income, while membership duration, house …

The Nexus Between Bank Credit Development And Economic Growth In Indonesia, Arisyi Fariza Raz

DLSU Business & Economics Review

The issue about the causal relationship between economic growth and credit market development is very important, particularly in a big emerging economy such as Indonesia, which has implemented various financial reforms following East Asian Financial Crisis in 1997. Efficient credit allocation in the banking sector will distribute the credit to the productive sector and, thus, promote economic growth. Meanwhile, development in the business sector will also increase demand for credit, encouraging credit market development. Given this rationale, this study aims at finding the significance of the linkage between economic growth and credit market development in Indonesia by investigating their long-run …

Mobile Phones And Growth Of Microenterprises: A Case Study Of Safaricom’S “Zidisha Biashara” Customers, Geoffrey Wandeto Mwangi, Freddie R. Acosta

DLSU Business & Economics Review

The study aimed at establishing the impacts of mobile phones usage on the growth of microenterprises. The study focused on mobile phones (and not telephony or telecommunications in general) because of the speedy adoption and widespread usage of mobile phones witnessed in Kenya over the last 10 years. The objectives of the study were based on three indicators of business growth, that is, income, profitability (cost management), and customer base. The study adopted a descriptive design method since it aimed at discovering and describing if a relationship exists between the variables. The study purposively sampled 100 microenterprises from Safaricom’s Zidisha …

Risk Information Impact On Investment Decisions: Experimental Test Of Pmm Theory, A Case Of Indonesia, Negina Kencono Putri, Zaki Baridwan, -- Supriyadi, Ertambang Nahartyo

DLSU Business & Economics Review

The aim of this study is to examine the Probabilistic Mental Model (PMM) Theory as an explanation of the framing effect in the context of reporting risk in different formats in Indonesia. The study was conducted using an online field experimental method with 3x4x2 mixed design, involving 54 investment analysts as participants. Experiments were conducted to test whether different formats of risk information—given the time sequence associated with the framing effect as explained by the PMM Theory—influence the investment decision-making process. The results show that participants chose to take action that is not at risk when the information presented is …

On Paternity Leaves And Parental Leaves – The Dilemma Over “Daddy Days”, Emily Sanchez Salcedo

DLSU Business & Economics Review

Filipino fathers generally refrain from undertaking childcare functions, an attitude that can be traced from the traditional notion that men are the economic providers while women are the nurturers of the family. In 1996, a breakthrough legislation was passed by the Philippine Legislature providing for seven days of paid paternity leave. A good beginning, but certainly not sufficient if the intention is really for the father and mother to share in the joys and pains of parenthood. Thus, Filipino women are left with no choice but to be mothers first and workers second. The article will look at experiences in …

The Effect Of State Corporate Income Tax Rate Cuts On Job Creation, Xiaobing Shuai, Christine Chmura

School of Professional and Continuing Studies Faculty Publications

This paper compares the employment growth of states that enacted corporate income tax rate cuts in the past 23 years with those making no changes. Overall employment comparisons from 1990 to 2012 suggest that a reduction in the corporate income tax rate is associated with faster job creation. The states that cut corporate income tax rates started with slower employment growth than the states that made no changes. However, the growth gaps between the two groups of states disappeared in about five years after the tax cuts were made. Regression results confirm the observation that lower corporate tax rates have …

Fixed Index Annuity Return And Risk Analysis With An Enhanced Model, Zhixin Wu, Lei Liang, Huong Dao, Linh Phuong Nguyen

Mathematics Faculty Publications

This paper examines the risk and return of fixed index annuity (FIA) with an enhanced model framework which takes into account correlations among market variables and a changing participation rate fluctuating with the market moves. The FIA business model is discussed to explain the participation rate model. Sensitivity analysis of FIA returns is performed for key model assumptions. The risk and return profile of the mix (30/70, 40/60, 50/50, 100/0) of the S&P 500 Index and the 1-year Treasury bills is compared with that of the FIAs. This study focuses on 2 hypothetical contracts: (10-year) annual reset Point-to-Point (PTP) and …

Rational Financial Management: Evidence From Seasoned Equity Offerings, Michael Barclay, Fangjian Fu, Clifford Smith

Research Collection Lee Kong Chian School Of Business

Current theories of capital structure have difficulty explaining the aspects of financing behavior we document. In contrast to the tradeoff theory, seasoned equity offers frequently move firms away from their target leverage ratios. At odds with the pecking-order theory, SEO firms typically are financially healthy companies with low leverage, unused debt capacity and substantial cash balances. Inconsistent with the market-timing theory, SEOs appear to be driven by capital requirements associated with large investment projects rather than by market-timing considerations. Moreover, firms issue debt following SEOs, not only to finance investment, but to increase leverage toward its target level. Each of …

International Banking Sector Linkages: Did The Global Financial Crisis Strengthen Or Weaken The Linkages?, James Edward Benton

Theses and Dissertations in Business Administration

This dissertation examines the interactions or linkages between the U.S. banking sector and the other eight major banking center countries around the globe. I use the national banking sector index for each country over a ten year period as a proxy for reactions to external shocks and examine whether these shocks spillover from the U.S. to the other major banking center countries as measured through their respective indices. I examine both daily residual returns as well as return volatility to measure these interactions between indices.

This study uses a vector auto-regression moving average (VARMA) as well as Granger-causality Wald test …