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Author Zhao, Linying
Title Three essays on investment companies
book jacket
Descript 172 p
Note Source: Dissertation Abstracts International, Volume: 70-08, Section: A, page: 3129
Adviser: Wei Jiang
Thesis (Ph.D.)--Columbia University, 2009
This dissertation studies investment companies, and contains three chapters
Chapter 1 studies the value of mutual fund directors' ownership. Using hand-collected data around the first-time disclosure of directors' ownership in the funds they oversee, I provide empirical evidence that investors value such ownership as a commitment to diligent monitoring; that is, flows into mutual funds in the first two months after disclosure are positively related to directors' ownership. I also find that directors' ownership, particularly independent directors', is more valuable to investors in those funds that lack monitoring by institutional investors, or whose asset style demands more monitoring by directors. Finally, I find that investors form expectations of directors' ownership in the funds they oversee, and respond only to ownership that is unexpected by them. These findings have implication for the value of insider ownership as a mechanism of corporate governance in general
Chapter 2 investigates whether ownership by independent directors could provide them with effective monitoring incentives and thus helps reduce fund discounts in the closed-end fund industry. I find that after controlling for fund observed and unobserved characteristics with the latter proxied by fund fixed-effects, independent directors' ownership is significantly negatively related to fund discounts. This finding might imply that fund independent directors become better monitors when they have larger ownership in the funds they oversee. I also find that funds whose independent directors have larger ownership are more likely to conduct share repurchases in order to reduce fund discounts
Chapter 3 examines the applicability of closed-end fund discount theories in explaining the pricing behavior of closed-end funds in China. I first explore the cross-sectional variations in discount, and find that proxies related to the agency theory alone could explain more than 50% of the variations. For the time-series variations in discount, the liquidity of fund shares seems to have the major effects compared to investor sentiment, and is negatively related to discount as predicted by the liquidity theory. I further show that the IPO behavior of Chinese closed-end funds is consistent with the prediction of the investor sentiment theory
School code: 0054
Host Item Dissertation Abstracts International 70-08A
Subject Economics, Finance
Alt Author Columbia University
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