2020

Career Risk and Market Discipline in Asset Management

Särtryck nr 2020:7

Författare: Andrew Ellul, Marco Pagano och Annalisa ScognamiglioÅr: 2020 Publikation: Review of Financial Studies Årgång (nr): 33 (2) Sidor: 783–828
Artikeln online (behörighet kan krävas)


We establish that the labor market helps discipline asset managers via the impact of fund liquidations on their careers. Using hand-collected data on 1,948 professionals, we find that top managers working for funds liquidated after persistently poor relative performance suffer demotion coupled with a significant loss in imputed compensation. Scarring effects are absent when liquidations are preceded by normal relative performance or involve midlevel employees. Seen through the lens of a model with moral hazard and adverse selection, these scarring effects can be ascribed to a drop in asset managers’ reputation. The findings suggest that performance-induced liquidations supplement compensation-based incentives.


Referens:
Ellul, Andrew, Marco Pagano och Annalisa Scognamiglio (2020), "Career Risk and Market Discipline in Asset Management". Review of Financial Studies 33(2), 783–828.

Aktuell forskare

Gabriel Heller Sahlgren Ph.D.

Ämnesområden: Hälsa, privatiseringar, skattefinansierade tjänster, utbildning

Några av de frågor Gabriel Heller Sahlgren försöker besvara i sin forskning:

  • Vad krävs för att skolmarknader ska fungera?
  • Hur reagerar aktörer inom skolväsendet på ekonomiska incitament?
  • Skillnader mellan vinstdrivande och icke-vinstdrivande skolor.

 

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