Do vertical relations matter to fund flows under oligopolistic market structures?

Kang Baek ()
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Kang Baek: Hanbat National University

No 5306830, Proceedings of International Academic Conferences from International Institute of Social and Economic Sciences

Abstract: Uninformed investors preferentially select distribution companies to purchase funds that suit their investment objectives, because they cannot evaluate each product themselves. Thus, the investment decision depends significantly on their chosen fund distributor?s recommendation. It may lead to conflicts of interest between fund distributors and their customers because distribution professionals and their affiliated financial companies have an incentive to prioritize their profits over investors under oligopolistic market structures. This study demonstrates that money flows into a fund, fund management company and fund distributor have significantly different patterns according to distribution channels, and this distinction is affected by vertical relations among financial companies. Money flows from affiliated distribution channels are less sensitive to the determinants of investment decision compared with non-affiliated ones. This result contributes by providing the insight that changes in the incentive structure of distribution channels result in different outcomes in terms of investor protection and market competition under oligopolistic distribution structures.

Keywords: Fund Flow; Distribution Channel; Investor Protection; Oligopolistic Market Structure; Vertical Relation. (search for similar items in EconPapers)
JEL-codes: G20 G28 L40 (search for similar items in EconPapers)
Pages: 1 page
Date: 2016-11
New Economics Papers: this item is included in nep-com and nep-ind
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Published in Proceedings of the Proceedings of the 26th and the 27th International Academic Conference (Istanbul, Prague), Nov 2016, pages 2-2

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Persistent link: https://EconPapers.repec.org/RePEc:sek:iacpro:5306830

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