Matching Capital and Labor
Jonathan B. Berk,
Jules van Binsbergen () and
Journal of Finance, 2017, vol. 72, issue 6, 2467-2504
We establish an important role for the firm by studying capital reallocation decisions of mutual fund firms. The firm's decision to reallocate capital among its mutual fund managers adds at least $474,000 a month, which amounts to over 30% of the total value added of the industry. We provide evidence that this additional value added results from the firm's private information about the skill of its managers. The firm captures this value because investors reward the firm following a capital reallocation decision by allocating additional capital to the firm's funds.
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Working Paper: Matching Capital and Labor (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jfinan:v:72:y:2017:i:6:p:2467-2504
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