The performance of emerging hedge funds and managers

This paper provides the first systematic analysis of performance patterns for emerging funds and managers in the hedge fund industry. Emerging funds and managers have particularly strong financial incentives to create investment performance and, because of their size, may be more nimble than established ones. Performance measurement, however, needs to control for the usual biases afflicting hedge fund databases. After adjusting for such biases and using a novel event time approach, we find strong evidence of outperformance during the first two to three years of existence. Each additional year of age decreases performance by 42 basis points, on average. Cross-sectionally, early performance by individual funds is quite persistent, with early strong performance lasting for up to five years.     

Nonprofit boards: Size,performance and managerial incentives

We examine relations between board size, managerial incentives and enterprise performance in nonprofit organizations. We posit that a nonprofit's demand for directors increases in the number of programs it pursues, resulting in a positive association between program diversity and board size. Consequently, we predict that board size is inversely related to managerial pay-performance incentives and positively with overall organization performance. We find empirical evidence consistent with our hypotheses. The number of programs is positively related to board size. Board size is associated negatively with managerial incentives, positively with program spending and fundraising performance, and negatively with commercial revenue, in levels and changes.     

Monetary Policy and Financial Stability: The Role of Inflation Targeting

This article examines the relationship between Inflation targeting (IT) and financial instability from 1990 to 2015 for Asian economies. To measure financial instability, a multidimensional financial conditioning index is calculated following the ECB's approach. Using a fixed effects panel data model the study finds that adoption of IT policy in Asian economies has an adverse impact on financial stability, thus rejecting the ‘conventional wisdom’ hypothesis. Further, the Vector Autoregression (VAR) result shows that an IT regime increases housing returns and encourages investors to take higher risks.     

Central Transfer a Curse or Blessing? Evidence from the Relative Revenue Effort of Indian States

This paper evaluates the revenue effort of Indian states during the 13th and 14th Finance Commission periods and estimates the impact of central transfers recommended by the Finance Commission on the relative revenue effort of states. Using panel data the study finds that Bihar, Uttar Pradesh, Madhya Pradesh, Assam and Kerala are the top five states with the greatest relative revenue effort. Further, the impact of central transfers on revenue effort was found to be negative, suggesting that greater devolution encourages laxity in the state's tax collection efficiency by providing perverse incentives.     

Motion Picture-Induced Visual,Vocal and Celebrity Effects on Tourism Motivation: Stimulus Organism Response Model

Motion pictures play a predominant role in enhancing the consumers' awareness of tourism destinations and inspiring their motivation to visit destinations. “Hallyu” (Korean Wave), a platform of Korean cultural exports, has altered the Korean tourism industry and now attracts travelers from around the world. Utilizing the popularity of the Korean Wave, the Korean Tourism Organization promotes Korean tourism attractions through motions pictures, including Korean films, television drama series, music and K-pop. The visual, vocal and celebrity effects which emanate from Korean motion pictures are expected to influence travelers' intent to visit and actual visitation. A questionnaire was distributed to Thai travelers and a total of 191 valid questionnaires were analyzed using regression analysis. The results indicate that visual and vocal effects emanating from Korean motion pictures fueled travelers' intention to visit Korea and explore Korean culture and tourism attractions. However, the results indicate no significant effect of celebrity endorsements on travelers' intentions.     

Finance Constraints and Firm Transition in the Informal Sector: Evidence from Indian Manufacturing

This paper focuses on the role of finance constraints in determining the lack of transition of firms in India from very small family firms, which are the predominant type of firms in the informal sector, into larger informal firms that employ non-family labour. Using a rich firm-level data-set drawn from nationally representative surveys of the Indian informal manufacturing sector, this paper tests for the role played by finance constraints in firm transition in the informal sector at the firm and district level. There is evidence that the difficulty that firms face in accessing external finance acts as a significant constraint to small firm growth in the informal sector. Looking at data from India's districts, it is found that the financial development in a given district increases the likelihood that firms in the district will make the transition from household enterprises into non-household enterprises.     

Constructing and Testing Alternative Versions of the Fama–French and Carhart Models in the UK

This paper constructs and tests alternative versions of the Fama–French and Carhart models for the UK market with the purpose of providing guidance for researchers interested in asset pricing and event studies. We conduct a comprehensive analysis of such models, forming risk factors using approaches advanced in the recent literature including value‐weighted factor components and various decompositions of the risk factors. We also test whether such factor models can at least explain the returns of large firms. We find that versions of the four‐factor model using decomposed and value‐weighted factor components are able to explain the cross‐section of returns in large firms or in portfolios without extreme momentum exposures. However, we do not find that risk factors are consistently and reliably priced.