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Public versus Private Ownership and Fund Manager Turnover
Author(s) -
Adams John C.,
Mansi Sattar A.,
Nishikawa Takeshi
Publication year - 2012
Publication title -
financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.647
H-Index - 68
eISSN - 1755-053X
pISSN - 0046-3892
DOI - 10.1111/j.1755-053x.2012.01220.x
Subject(s) - business , incentive , mutual fund , sample (material) , turnover , control (management) , finance , fund administration , accounting , fund of funds , economics , microeconomics , management , chemistry , chromatography , market liquidity
We examine the correlation between organizational structure (public vs. private) and managerial turnover in a large sample of United States offered mutual funds. Consistent with the hypothesis that publicly traded and privately held firms have different incentive structures and, as such, should differ in their treatment of internal control mechanisms, we find that public sponsors are more sensitive to prior fund performance when making replacement decisions and experience smaller post turnover performance improvements. Additional testing suggests a greater likelihood of fund manager replacement when mutual funds are team managed and when fund boards are more independent.