A RE-EXAMINATION OF THE EFFECT OF 12B–1 PLANS ON MUTUAL FUND EXPENSE RATIOS

In this paper we re-examine the effect of 12b–1 payments on mutual fund expense ratios by analyzing data from 1988 through 1991. The findings are consistent with previous studies that find charges are a dead-weight cost borne by shareholders. However, we show that this cost increases over time.     

Quality Competition and Social Welfare in Markets with Partial Coverage: New Results*

We use a vertical product differentiation model under partial market coverage to study the social welfare optimum and duopoly equilibrium when convex costs of quality provision are either fixed or variable in terms of production. We show the following new results. First, under fixed costs, the social planner charges a uniform price for the single variant that just covers costs of quality provision. Like the duopoly equilibrium, this socially optimal pricing entails a partially uncovered market, but a smaller share of the market is served compared with the duopoly equilibrium. Second, for the variable cost case, it is socially optimal to provide both high‐ and low‐quality variants, but market shares need not be equal. This differs from the result in fully covered markets. Third, in the duopoly equilibrium, the quality spread is too wide under variable costs relative to the social optimum. Under fixed costs, the duopoly produces two variants, but quality is too low relative to the social optimum, which has only one variant.     

The Impact of Macroeconomic Risk on Asset Prices in Ghana, 1997–2002

Abstract: The dwindling nature of overseas development assistance in the early part of the 1990s called for the establishment of capital markets in some African countries, including Ghana, with the view to increasing foreign direct investments and achieving sustainable inflows, growth and development. One important factor which affects the determination of prices and the growth of capital markets is macroeconomic risk which is quite high in developing countries. Following works done on advanced stock markets, this study seeks to investigate the impact of six macroeconomic risk factors on asset pricing in the various industrial classification — financial, manufacturing, food and beverages, distribution and mining under the Ghana Stock Exchange (GSE) for the period January 1997 to December 2002. Using the arbitrage pricing methodology developed by Ross (1976) and Chen et al. (1986) , the study revealed that investors in Ghana considered three main macroeconomic risk factors — short‐term interest rate risk, inflation risk and the term structure of the country's interest rate in the determination of the various industrial asset prices during the period under consideration. Analysis of the risks and returns profile of the industries also shows that financial assets made the best gains on the market. Both general and specific policy recommendations aimed at improving the performance of the GSE are explored.     

Futures and forward price differential and the effect of marking‐to‐market: Australian evidence

The objective of this paper is to examine the effects of marking‐to‐market of futures contracts on the price differential between futures and forward contracts based on the predictions of the Cox, Ingersoll and Ross (1981) (CIR) model. Cox et al ., (1981) derive a series of propositions with respect to the relationship between futures and forward prices and a set of testable implications. These are tested empirically in this paper using Australian data from November 1991 to June 1997. The results provide evidence of the presence of significant futures and forward price differences, where the futures price is consistently below the forward price. Only partial support is found for the Cox et al ., (1981) propositions, implying that the effect of marking‐to‐market is not able to fully account for the price differential. Therefore, it is not possible to rule out the influence of other institutional factors on the futures‐forward price difference.     

University-Provided Retirement Planning Support and Retiree Financial Satisfaction During Retirement: Differences by Gender, Job Classification, and Planning Behavior

Sound financial planning and financial advice is necessary to achieve retirement income adequacy. The shift from defined benefit to defined contribution pension plans and the recent bankruptcy of Enron Corporation underscore the importance of managing retirement accumulation and liquidation risks. This study analyzes the effectiveness and adequacy of institutional-provided information and advice on employees' retirement planning decisions and their satisfaction with financial resources during retirement. Results suggest that retirement planning should begin earlier in an employee's career and that employer-provided retirement information and advice is a highly valued service. Gender, planning practices, job classification, and age are all significant predictors of satisfaction with financial resources during retirement. Targeting women and union employees with retirement information and advice that focuses on allocating contributions using a balanced portfolio approach should result in significant increases in satisfaction with financial resources during retirement. Regulatory objectives should focus on reducing retirement accumulation and liquidation risks, improving the delivery of professional financial advice to plan participants, and expanding qualified retirement plan choice for all labor force participants. To encourage employer participation in employee retirement planning, employers acting in "good faith" should be federally protected from liability for providing retirement planning information and advice to employees.     

Human resource management,union voice and the use of discipline: an analysis of WIRS3

Three outcomes of personnel practice (rates of discipline, quitting and absence) are analysed. There was no firm association with measures of practices associated with Human Resource Management. By contrast, unionisation was strongly associated with the low use of discipline and low quit rates: union ‘voice’ remains influential in the 1990s.     

A dynamic approach to the analysis of strategic alliances

The increasing trend in strategic alliance formation between major firms around the world, has prompted researchers from various disciplines to look at this phenomenon in great detail. In this paper, we review alternate approaches in the literature in this area. We then propose a non-linear dynamic approach to study the formation of competitive strategic alliances and contrast it with the traditional game-theoretic approach. The pros and cons of these two approaches are discussed with reference to a competitive alliance scenario. Dynamic models have significant managerial implications as they enable us to investigate ‘if-then’ type scenarios and project the impact of different strategies.