Portfolio manager ownership and fund performance

This paper documents the range of portfolio manager ownership in the funds they manage and examines whether higher ownership is associated with improved future performance. Almost half of all managers have ownership stakes in their funds, though the absolute investment is modest. Future risk-adjusted performance is positively related to managerial ownership, with performance improving by about 3 basis points for each basis point of managerial ownership. These findings persist after controlling for various measures of fund board effectiveness. Fund manager ownership is higher in funds with better past performance, lower front-end loads, smaller size, longer managerial tenure, and funds affiliated with smaller families. It is also higher in funds with higher board member compensation and in equity funds relative to bond funds. Future performance is positively related to the component of ownership that can be predicted by other variables, as well as the unpredictable component. Our findings support the notion that managerial ownership has desirable incentive alignment attributes for mutual fund investors and indicate that the disclosure of this information is useful in making portfolio allocation decisions.     

Creativity in Design Engineering and the Role of Knowledge: Modelling the Expert

The present study focuses on the relationship between the acquisition of design knowledge by novice design students and the quality of their designs. Design learning is typically based on action and reflection. Knowledge of solution processes, being part of this reflection, is found to be crucial in monitoring and controlling the design process and in reaching an optimal, creative result. The studies described in this article suggest a close relationship between the amount of process knowledge – knowledge of managing and monitoring the solution finding process – reported by novice designers, and the creativity of the designed product.     

Management control systems and strategy: A resource-based perspective

The aim of this study is to examine, from a resource-based perspective, the relationships between the use of management control systems (MCS) and organizational capabilities. More specifically, the study focuses on the diagnostic and interactive uses of one important aspect of MCS, namely performance measurement systems (PMS), and four capabilities leading to strategic choices (i.e., market orientation, entrepreneurship, innovativeness, and organizational learning). Three research questions are investigated in this study: (i) to what extent do the diagnostic and interactive uses of MCS contribute specifically to the creation and maintenance of capabilities leading to strategic choices? (ii) To what extent do the diagnostic and interactive uses of MCS act in combination to produce dynamic tension which contributes to the creation and maintenance of these capabilities? (iii) To what extent does the use of MCS contribute to organizational performance? The results suggest that an interactive use of PMS fosters the four capabilities by focusing organizational attention on strategic priorities and stimulating dialogue. Also, by creating constraints to ensure compliance with orders, the diagnostic use of PMS exerts negative pressure on these capabilities. Furthermore, some evidence suggests the influence of dynamic tension resulting from the balanced use of PMS in a diagnostic and interactive fashion on capabilities and performance.     

The decline of the marginal utility of the guilder, 1952–1977

Summary The annual change in the marginal utility of the guilder is numerically specified, together with its two components: the real-income and the price level components. Research supported in part by the McKethan-Matherly Eminent Scholar Chair, University of Florida, and the Deutsche Forschungsgemeinschaft (German Research Foundation).     

The maximum entropy median in the presence of an outlier

When a random sample of size n from a standard normal population is contaminated by a normal outlier with either a different mean or a different variance, the maximum entropy median outperforms the sample median in terms of squared-error loss. The only exception is when n=3 and the outlier mean or variance is sufficiently different.     

The effect of measurement errors on the estimation of demand systems

Statistical inference in complete demand systems is usually based on imperfect data. This letter explores some of the implications of these imperfections, in particular for the estimates of income elasticities.     

A differential approach to U.S. import demand

We apply the differential production theory approach to U.S. import data (1921-70) without imposing restrictions on Divisia elasticities. The estimates of these elasticities are 0.58 for the imports of foods, 0.95 for those of crude materials, 1.34 for semi-manufactures, and 1.16 for finished manufactures.     

The symmetric maximum entropy distribution

The symmetric maximum entropy (ME) distribution is introduced based on symmetrized order statistics. Its properties (including higher-order moments) are compared with those of the non-symmetric ME distribution.     

New results on the preference independence transformation

A preference independence transformation of U.S. consumption data, including leisure, shows that affordable free time is the transformed good with the largest share in the semidurables/ durables/leisure group. Other results concern the effect of the transformation on the group structure under weak separability.