Pricing of Mutual Fund Services in Retirement Plans: Evidence from Open-End Equity Funds

Management fees of mutual funds are more costly to investors than is often realized. Moreover, research indicates that in many cases, the fees are not related to performance, contrary to what might be expected from an efficient market. This study uses sample data to illustrate the consequences of inefficiency to an individual investor. It then turns to an empirical examination of the determinants of the ratio of management fees to total assets (MER), investigating market concentration, fund performance, and non-performance characteristics as explanatory variables. All of these classes of variables contributed to the variation of MERs . JEL Classification G23     

Employment response to supply and demand shocks under envy in wage formation

Summary We analyse the impact of wage envy on employment and on its sectorial allocation. A multi-sector general equilibrium model in which externalities among sectors arise through wage envy and decentralized bargaining is presented. In the no externality case, sectorial employment is a function of sectorial productivity and of the disutility of work. In the externality case, sectorial employment is additionally affected by union power in all sectors (with a negative sign even though bargaining is efficient), by the productivity in the other sectors (with an undetermined sign) and by the relative average propensity to consume goods of this sector (with a positive sign).Rijksuniversiteit Limburg, FNRS and Université Catholique de Louvain. I would like to thank Franz Palm for valuable comments on an earlier draft. This paper benefitted also from discussions with Torben Andersen, Jacques Drèze and Henri Sneessens (without implying them in any mistake). The detailed comments of the anonymous referee contributed to a large extent to clarify the exposition of the model.     

Technology Transfer and Learning

Despite the fact that international technology transfer has been widely studied its management still encounters many difficulties. To fully understand the issues that are relevant to the process of transferring production technology, it is necessary to determine the important factors that influence this process. Learning curves are often used as a means of determining the time required to become familiar with a transferred technology. The cases discussed in this paper have all employed learning curves, which were established at the outset of the transfer process and which turned out to be incorrect. As a consequence the envisaged efficiencies were not obtained. This phenomenon is partly due to the fact that when technology is transferred to a relatively inexperienced 'destination company', the curve is established based on the circumstances of the 'source company'. The case study findings lead to the conclusion that to establish a realistic curve a more comprehensive method is required than simply basing anticipated performance on that achieved at the source company.     

Entry and regulation: evidence from health care professions

In many countries, pharmacies receive high regulated markups and are protected from competition through geographic entry restrictions. We develop an empirical entry model for pharmacies and physicians with two features: entry restrictions and strategic complementarities. We find that the entry restrictions have directly reduced the number of pharmacies by more than 50%, and also indirectly reduced the number of physicians by about 7%. A removal of the entry restrictions, combined with a reduction in the regulated markups, would generate a large shift in rents to consumers, without reducing the availability of pharmacies. The public interest motivation for the current regime therefore has no empirical support.     

Towards collective business action and cross-sector collaboration in responsible competitiveness clusters in southern Africa

Responsible competitiveness clusters are cross-sector collaboration initiatives focused on identifying and acting upon synergies between sustainable development and economic competitiveness objectives. By means of three case studies in southern Africa this paper investigates the incentives, opportunities and challenges encountered in the emergence of such clusters. The first case study focuses on a regional response to the development challenges encountered in a South African mining area, the second describes efforts to make the Malawian agriculture sector more inclusive and competitive and the third discusses options for enhancing the competitiveness of the Lesotho textile sector. The paper concludes with a discussion of the role of international trade networks, the institutional framework, public sector support and internal governance processes as key factors influencing the initial level of success of these initiatives.     

The Recognition and Timing of Deferred Tax Liabilities

Abstract:   This paper examines the characteristics of firms that account for deferred tax liabilities related to government investment grants under an extended adoption timing period. Not only the recognition but also the timing decision is associated with changes in future performance and changes in the debt structure. Recognisers outperform non‐recognisers in the future, while early recognition is related to post recognition performance but only for those firms that currently perform well. Changes in the balance sheet structure are also related to both decisions. Firms with recent increases in the debt level tend to postpone recognition, while currently well‐performing firms that increase their future debt level are less likely to recognise deferred taxes.     

The relevance of currency risk in the EMU

We investigate how the elimination of intra-European exchange risk may affect international financial markets using a conditional version of the International CAPM. We estimate the EMU and non-EMU components of aggregate currency risk and document significant exposures to both. The premium for EMU risk is positive and associated with exposure to the French, Italian and Spanish currencies. The premium for non-EMU risk is consistently negative and accounts for most of the aggregate currency premiums. In the 1990s, exposures to EMU risk declined significantly while exposures to non-EMU risk increased. Hence the adoption of the Euro is unlikely to have a large impact on aggregate currency risk premiums.     

INDUSTRIAL POLICY IN GREAT BRITAIN AND ITS EFFECT ON TOTAL FACTOR PRODUCTIVITY IN MANUFACTURING PLANTS, 1990–1998

Industrial policy in any economy has a number of varying and occasionally conflicting objectives, but the overarching intention of the various grants, subsidies and support schemes, arguably, must be to improve the economic performance of the plants they assist directly. However, in the absence of counterfactual evidence, whether or not assistance does improve performance is hard to establish. In this paper, we consider the impact of two UK government industrial support schemes (Regional Selective Assistance and the Small Firm Merit Awards for Research and Technology) on UK manufacturing plant level total factor productivity in an attempt to answer the question, ‘did assistance make a difference?’