Of Tournaments and Temptations: An Analysis of Managerial Incentives in the Mutual Fund Industry

Keith C Brown, W V Harlow and Laura T Starks

Journal of Finance, 1996, vol. 51, issue 1, 85-110

Abstract: The authors test the hypothesis that, when their compensation is linked to relative performance, managers of investment portfolios likely to end up as 'losers' will manipulate fund risk differently than those managing portfolios likely to be 'winners.' An empirical investigation of the performance of 334 growth-oriented mutual funds during 1976 to 1991 demonstrates that mid-year losers tend to increase fund volatility in the latter part of an annual assessment period to a greater extent than mid-year winners. Furthermore, the authors show that this effect became stronger as industry growth and investor awareness of fund performance increased over time. Copyright 1996 by American Finance Association.

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (530)

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-1082%2819960 ... O%3B2-1&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jfinan:v:51:y:1996:i:1:p:85-110

Ordering information: This journal article can be ordered from
http://www.afajof.org/membership/join.asp

Access Statistics for this article

More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().