THE COST OF MUTUAL FUND DISTRIBUTION FEES

Many individuals purchase shares in mutual funds as investments. With a lack of evidence supporting performance persistence in fund returns, investors should consider expenses as a fund-selection tool since fund expenses have a negative effect on fund returns. One of the largest expenses incurred by fund investors is distribution expenses, which include both load charges and annual fees. Close to two-thirds of all equity funds charge investors for fund distribution. The true cost of these distribution fees to investors is hard to measure because a myriad of distribution arrangements have evolved that vary both the timing and magnitude of distribution charges. We derive a simple methodology that expresses the present value of distribution costs as a percentage of the original investment in fund shares for any expected holding period. This methodology allows direct comparison of the effect on investors of distribution fees for mutual funds with different types of sales arrangements.     

Inflation targeting and monetary policy in Canada: What is the impact on inflation uncertainty?

Inflation uncertainty has been demonstrated both theoretically and empirically to lower real output. This paper examines the impact of inflation targeting in Canada on inflation uncertainty, as well as persistence. Our results indicate that inflation targeting lowered inflation persistence, but actually increased uncertainty. Such an effect may be due to the failure of the previous formal target, the M1 money supply, to successfully combat inflation.     

Product resource–capability complementarity,integration mechanisms,and first product advantage

The current study extends work on resource-based theory (RBT) by exploring resource—capability complementarity in a new context—that of new technology ventures' (NTVs) first product (FP) commercialization in India. This study examines the influence of marketing and technology resource–capability complementarity on FP positional advantages (differentiation and cost-efficiency) and their influence on first product performance (FPP). Furthermore, this study incorporates the influence of supplier integration (SI) mechanisms (in terms of knowledge sharing and co-commercialization) in the process of FP commercialization. The findings suggest that asset complementarities have a positive relation with FP positional advantages, in that both differentiation and cost-efficiency enhance an NTV's FPP, and that SI moderates the relationships between both marketing and technology R–C complementarity and FP positional advantages.     

Multi-firm voluntary disclosures for correlated operations

We study the no-arbitrage theory of voluntary disclosure (Dye, J Account Res 23:123–145, 1985, and Ostaszewski and Gietzmann, Rev Quant Financ Account 31: 1–27, 2008), generalized to the setting of $n$ firms, simultaneously and voluntarily, releasing at the interim-report date ‘partial’ information concerning their ‘common operating conditions’. Each of the firms has, as in the Dye model, some (known) probability of observing a signal of their end of period performance, but here this signal includes noise determined by a firm-specific precision parameter. The co-dependency of the firms results entirely from their common operating conditions. Each firm has a disclosure cutoff, which is a best response to the cutoffs employed by the remaining firms. To characterize these equilibrium cutoffs explicitly, we introduce $n$ new hypothetical firms, related to the corresponding actual firms, which are operationally independent, but are assigned refined precision parameters and amended means. This impounds all existing correlations arising from conditioning on the other potentially available sources of information. In the model the actual firms’ equilibrium cutoffs are geometric weighted averages of these hypothetical firms. We uncover two countervailing effects. Firstly, there is a bandwagon effect, whereby the presence of other firms raises each individual cutoff relative to what it would have been in the absence of other firms. Secondly, there is an estimator-quality effect, whereby individual cutoffs are lowered, unless the individual precision is above average.     

The Effect of Uncertainty on Optimal Control Models in the Neighbourhood of a Steady State

For both discrete and continuous time this paper derives the Taylor approximation to the effect of uncertainty (in the simple sense of risk, not Knightian uncertainty) on expected utility and optimal behaviour in stochastic control models when the uncertainty is small enough that one can focus on only the first term that involves uncertainty. There is a close and illuminating relationship between the discrete-time and continuous-time results. The analysis makes it possible to spell out a tight connection between the behaviour of a dynamic stochastic general equilibrium model and the corresponding perfect foresight model. However, the quantitative analytics of the stochastic model local to a certainty model calls for a more thorough investigation of the nearby certainty model than is typically undertaken.     

Modelling the Impact of Demographic Change Upon the Economy

Over the next few decades there will be significant changes in the demographic structure of nearly all developed countries. Such dramatic demographic change could have a powerful impact upon saving behaviour, but estimates of how great the effects will be differ depending on what evidence is used. This paper argues that simulations based on calibrated general equilibrium models are likely to provide the most reliable evidence. A model is developed and is used to assess the impact of reforms to pension systems.     

Organic,incremental and induced paths to sustainable mass tourism convergence

This paper positions sustainable mass tourism (SMT) as the desired and impending outcome for most destinations. Natural resource scarcity, development of green technology, climate change awareness, the global financial crisis, institutionalised environmentalism and Internet technology all facilitate the emergence of sustainability as a societal norm that is combining with the longer established norm of growth desirability. SMT convergence is occurring along three distinctive paths in an evolutionary manner that reflects environmental pragmatism. The market-driven ‘organic’ path describes the conventional tourism area life cycle model of Butler, whilst the regulation-driven ‘incremental’ path entails deliberate alternative tourism (DAT) in which carrying capacities are gradually increased to accommodate higher visitation levels. The hybrid ‘induced’ path describes planned mega-resorts conceived as growth poles. Each model is invested with its own specific planning and management implications.