Prison Industries and the private sector

In 1979, Congress passed the Prison Industry Enhancement (PIE) Act to promote private production within prisons. As of June 1994, 31 states had instituted PIE projects. Using a public choice model, this paper attempts to explain the likelihood that a stat ewould choose to participate in PIE. Using logistic regression, the study finds that states with stronger unions, democratic governors, and high unemployment will be less likely to allow PIE projects. Alternatively, states that exhibit a progressive prison management will be more likely to allow PIE projects.     

Size and investment performance: a research note

This article examines the performance of actively managed Australian equity funds and the extent to which both fund size and manager size are related to risk-adjusted returns. Larger investment managers, by definition, engage in higher trade volume. The literature documents that transaction costs and trade difficulty increase with trade size, given difficulties associated with 'large' trades and their potential market impact on security prices. Therefore, ceteris paribus , large orders are consistent with lower levels of efficiency in trade execution and higher transaction costs. While larger investment managers may experience material disadvantages relative to their smaller counterparts, the Australian literature to date has largely ignored the issues of asset size and the long run performance of investment offerings. This article, employing returns and fund size data that control for survivorship bias, documents that while large retail active equity funds earn higher risk-adjusted returns (after expenses) than small funds, the difference in mean performance is not significantly different. In the institutional sphere, the study also finds no statistically significant performance differences (net of expenses) between funds on the basis of portfolio size. These findings suggest the hypothesis that performance declines with fund size is not supported empirically.     

Momentum investing and the asset allocation decision

This study examines the active asset allocation decisions of Australian multisector fund managers to determine whether active fund managers engage in momentum strategies. We find evidence supporting the existence of momentum investing in active asset allocation strategies. This evidence exists in the Australian Equities, Australian Fixed Interest and Listed Property asset classes. Interestingly, balanced funds adopt contrarian strategies in the International Equities asset class. We also examine whether there is any association between a fund's market timing skill and the execution of momentum strategies. Our results show that fund managers with no market timing skill are momentum investors.     

Broker recommendations and Australian small‐cap equity fund management

This study examines whether the abnormal performance of active Australian small‐cap equity fund managers is associated with broker recommendations. Our evidence supports the investment value of broker recommendations, showing significant abnormal returns (ARs) both pre‐ and post‐broker recommendations. We find that when a factor‐mimicking portfolio based on broker recommendations is added to a Carhart (1997) model, annual alphas are reduced by 48 basis points. Using transaction‐level data, buy trades following broker recommendations earn significant cumulative ARs of 1.56 per cent after 60 days. Overall, we find that broker recommendations account for an economically significant component of alphas.     

An Overview of the U.S. Regulated Fund Industry

The largest segment of the asset management business in the United States is registered investment companies (regulated funds). This article focuses on U.S. regulated investment companies—mutual funds, exchange-traded funds, closed-end funds, and unit investment trusts. These funds manage more than $17 trillion of assets, largely on behalf of U.S. investors. The industry has experienced strong growth over the past quarter century from asset appreciation and strong demand from households due to rising household wealth, the aging of the U.S. population, and the evolution of employer-based retirement systems. Price competition and supply-side product innovations and efficiencies have reduced the average price that investors pay for fund services.     

Measuring Stakeholder Perspectives on Environmental and Community Stability in a Tourism‐Dependent Economy

Tourism is promoted as an environmentally beneficial activity for Caribbean economies. Yet degradation still occurs and more integrated policy approaches are needed. Using Q‐methodology within a social‐ecological system (SES) framework, we quantified the importance of various policy issues to stakeholders in Providenciales, Turks and Caicos Islands, where tourism produces 77% of its GDP. Stakeholders agree Providenciales' economy benefits from a healthy marine environment, but disagree over which SES drivers are functionally important. Our results show that Q‐methodology is a robust tool for informing the policy‐making process and quantifying stakeholder views in a tourism‐dependent economy. Copyright © 2016 John Wiley & Sons, Ltd.     

The elusive relation between pension discount rates and deficits

The relation between defined-benefit (DB) pension discount rates and funding status is more complex than it might first appear. Existing evidence suffers from estimation biases that make precise inference unreliable. We document the biases and quantify their impact on inference in relation to corporate window-dressing of DB funding status. Our empirical evidence from the United Kingdom suggests that pension sponsors use discretion in the choice of pension discount rate not only to reduce reported deficits but also to reduce reported surpluses.     

The effect of non-financial performance measures,organisational politics and political skill on job performance: Evidence from China

We investigate the role of organisational politics (i.e., general political behaviour, going along to get ahead and pay and promotion policies) and political skill on the relationship between non-financial performance measures and job performance, relying on a sample of manufacturing firms in China. Results suggest that non-financial performance measures positively affect managers' job performance, and non-financial performance measures reduce general political behaviour and pay and promotion policies. Results further suggest that managers' political skill positively affects job performance, and political skill also moderates the relationships between (1) general political behaviour and (2) pay and promotion policies, and job performance.