The pension fund industry affects an enormous proportion of the world population and consists of more than $20 trillion of assets globally. Hence the performance of pension funds has major effects. This thesis investigates the performance of personal pension funds in the UK, one of the leading pension industries in the world. It identifies two important factors that are largely overlooked in the related literature: fund’s age and management outsourcing. Based on the ‘career concerns’ argument by Holmström (1999), it tests whether fund performance is age dependent, and in particular, whether funds perform better when they are young than when they ‘mature’. Moreover, one of the major features of the pension fund industry has been the enormous growth in management outsourcing. This thesis addresses this issue and tests whether there are differences in the performance between outsourced and internally managed funds, and investigates potential determinants of the decision to outsource. It argues that a ‘fashion to outsource’ may be partially responsible for the trend. Given that a CAPM-APT based analysis is not appropriate for the data at hand, the thesis employs three alternative performance measures, two of which utilise fund-specific benchmarks. The results show that risk-adjusted returns are statistically insignificantly different from zero but funds significantly outperform their benchmarks. Performance is found to change with fund’s age but this relationship is more complex than a simple ‘career-concern’ argument would predict. Risk-adjusted returns of the internally managed and the outsourced funds are both indifferent from zero but the outsourced funds are better at outperforming their benchmarks. Lastly, there is some evidence of a ‘fashion to outsource’. This research is novel in several ways. It provides the first detailed investigation of the performance of the UK personal pension funds. It is the first to address the question of potential factors (other than managerial characteristics) that may explain fund performance. It discusses the rise of outsourcing in the industry and analyses differences/similarities between performance of the outsourced and the internal funds. Finally, it is the first to investigate whether the rapid increase in outsourcing is due to ‘fashion’.

This dissertation examines the effect of career concerns on the pattern of investments selected by venture capital fund managers. I propose a simple model in which managers strategically adjust the variance of their portfolio to maximize the probability of raising a follow-on fund. The model demonstrates that career concerns can encourage venture capital fund managers to inefficiently select investments that are too conservative. The influence of these career incentives declines following good initial fund performance, leading to a positive correlation between early fund performance and late fund risk-taking. Using a unique data set of company-level cash flows from 181 venture capital funds, I demonstrate that the intra-fund patterns of investment in venture capital broadly match the predictions of the model. First, I show that the characteristics of career concerns in the venture capital industry are consistent with the assumptions which drive the model. Funds who perform well in their initial investments raise a new fund more quickly, and the size of their next fund is concave with respect to the existing fund's performance. Second, using a maximum likelihood methodology I show that venture capital fund managers select more risky portfolio companies following good performance and tend to be less diversified. / text

Using a novel setting, I examine the relation between a CEO's career concerns and the provision of an annual earnings forecast. Specifically, I exploit staggered changes in non-compete enforcement laws in three U.S. states as a source of exogenous variation in a CEO’s career concerns. Consistent with theory suggesting that career concerns increase a manager's aversion to risk, I find that a CEO is less likely to issue an earnings forecast in periods of stricter non-compete enforcement. Further, cross-sectional analyses indicate that the lower probability of forecast issuance is more pronounced for a CEO who has greater concern for his reputation, faces more risk in forecasting, and is more vulnerable to dismissal.

No description available.

<p>"Taxation, Career Concerns and CEO Pay". This paper proposes a simple dynamic model of equilibrium CEO compensation. Motivated by the strengthened career incentives stemming from the fall in the top income tax rates over the past decades, I study the implications of a model where the quality of talent identification depends on how hard individuals work in order to be among the winners in the contest for managerial positions. It is shown how the compensation of CEOs can be interpreted in this light, across time, across industries, and across countries, and I provide some evidence showing that the predictions of the model are in line with several empirical developments over the past decades.</p><p>"Incentives under Communism: The Value of Low-Quality Goods". In this paper, I study how efficiently centrally planned regimes can provide incentives across different stages of economic development. In particular, I study the attractiveness of an incentive system based on exclusive provision of high-quality goods to high-ranked members of society. At low levels of economic development, a self-interested regime can exploit such an incentive system to reduce the cost of providing incentives. However, such an incentive system generally loses its attractiveness as the economy grows. The economic performance of the centrally planned economies is then analyzed in light of this result.</p><p>"The Business of Troubled Autocrats". Many autocrats control resource rents. Typically, they rely on these rents in order to buy political support. In this paper, I study how such autocrats behave in product and capital markets, in particular at times of financial distress. The main questions are: How does the asset position of an autocrat affect his behavior as a producer in a market with rents? From whom does the autocrat obtain financing in order to get out of difficulties? I show that when the asset position of the autocrat drops below a certain threshold, output drops below the level of a standard monopolist. Further, the autocrat can obtain less expensive financing domestically by exploiting the presence of vested interests, implying that there is zero foreign debt in equilibrium.</p>

"Taxation, Career Concerns and CEO Pay". This paper proposes a simple dynamic model of equilibrium CEO compensation. Motivated by the strengthened career incentives stemming from the fall in the top income tax rates over the past decades, I study the implications of a model where the quality of talent identification depends on how hard individuals work in order to be among the winners in the contest for managerial positions. It is shown how the compensation of CEOs can be interpreted in this light, across time, across industries, and across countries, and I provide some evidence showing that the predictions of the model are in line with several empirical developments over the past decades. "Incentives under Communism: The Value of Low-Quality Goods". In this paper, I study how efficiently centrally planned regimes can provide incentives across different stages of economic development. In particular, I study the attractiveness of an incentive system based on exclusive provision of high-quality goods to high-ranked members of society. At low levels of economic development, a self-interested regime can exploit such an incentive system to reduce the cost of providing incentives. However, such an incentive system generally loses its attractiveness as the economy grows. The economic performance of the centrally planned economies is then analyzed in light of this result. "The Business of Troubled Autocrats". Many autocrats control resource rents. Typically, they rely on these rents in order to buy political support. In this paper, I study how such autocrats behave in product and capital markets, in particular at times of financial distress. The main questions are: How does the asset position of an autocrat affect his behavior as a producer in a market with rents? From whom does the autocrat obtain financing in order to get out of difficulties? I show that when the asset position of the autocrat drops below a certain threshold, output drops below the level of a standard monopolist. Further, the autocrat can obtain less expensive financing domestically by exploiting the presence of vested interests, implying that there is zero foreign debt in equilibrium.

This dissertation consists of three essays. The first essay examines a general theory of information based on informal contracting. The measurement problem—the disparity of true and measured performances—is at the core of many failures in incentive systems. Informal contracting can be a potential solution since, unlike in formal contracting, it can utilize a lot of qualitative and informative signals. However, informal contracting must be self-enforced. Given this trade-off between informativeness and self-enforcement, I show that a new source of statistical information is economically valuable in informal con- tracting if and only if it is sufficiently informative that it refines the existing pass/fail criterion. I also find that a new information is more likely valuable, as the stock of existing information is large. This information theory has implications on the measurement problem, a puzzle of relative performance evaluation and human resources management. I also provide a methodological contribution. For tractable analysis, the first-order approach (FOA) should be employed. Existing FOA-justifying conditions (e.g. the Mirrlees-Rogerson condition) are so strong that the information ranking condition can be applied only to a small set of information structures. Instead, I find a weak FOA- justifying condition, which holds in many prominent examples (with multi- variate normal or some of univariate exponential family distributions). The second essay analyzes the effectiveness of managerial punishments in mitigating moral hazard problem of government bailouts. Government bailouts of systemically important financial or industrial firms are necessary ex-post but cause moral hazard ex-ante. A seemingly perfect solution to this time-inconsistency problem is saving a firm while punishing its manager. I show that this idea does not necessarily work if ownership and management are separated. In this case, the shareholder(s) of the firm has to motivate the manager by using incentive contracts. Managerial punishments (such as Obama’s $500,000 bonus cap) could distort the incentive-contracting program. The shareholder’s ability to motivate the manager could then be reduced and thereby moral hazard could be exacerbated depending on corporate governance structures and punishment measures, which means the likelihood of future bailouts increases. As an alternative, I discuss the effectiveness of shareholder punishments. The third essay analyzes how education affect workers’ career-concerns. A person’s life consists of two important stages: the first stage as a student and the second stage as a worker. In order to address how a person chooses an education-career path, I examine an integrated model of education and career-concerns. In the first part, I analyze the welfare effect of education. In Spence’s job market signaling model, education as a sorting device improves efficiency by mitigating the lemon market problem. In my integrated model, by contrast, education as a sorting device can be detrimental to social welfare, as it eliminates the work incentive generated by career-concerns. In this regard, I suggest scholarship programs aimed at building human capital rather than sorting students. The second part provides a new perspective on education: education is job-risk hedging device (as well as human capital enhancing or sorting device). I show that highly risk-averse people take high education in order to hedge job-risk and pursue safe but medium-return work path. In contrast, lowly risk-averse people take low education, bear job-risk, and pursue high-risk high-return work path. This explains why some people finish college early and begin start-ups, whereas others take master’s or Ph.D. degrees and find safe but stable jobs. / text

No description available.

O objeto deste estudo é a verificação das propriedades métricas (validade de construto e consistência interna) do "Inventário de Preocupações de Carreira de Adulto - versão para Atletas" (IPCAAt 0 - 61) (Balbinotti e Balbinotti, 2008). Trata-se de um inventário de 61 itens (15 itens por dimensão, sendo 5 para cada subdimensão mais um item que avalia os projetos de uma provável mudança de carreira). O inventário analisa quatro dos cinco estados de desenvolvimento de carreira (a primeira foi excluída em razão da idade) conforme a teoria de Super (1957). Estes 4 estados e seus subestados se apresentam, em ordem, como segue: exploração (cristalização, especificação e realização); estabelecimento (estabilização, consolidação e avanço profissional); manutenção (manter posição, atualizar-se e inovar); e desengajamento (desaceleração, planificação da aposentadoria e vida de aposentado). Participaram desta pesquisa 336 atletas, brasileiros, de ambos os sexos (masculino, 255; feminino, 81) com idades variando de 16 a 56 anos, de 16 modalidades esportivas. Cuidados éticos foram tomados de forma que se obteve o consentimento de todos os sujeitos participantes da pesquisa. Primeiramente, foram analisadas as estatísticas de consistência interna do instrumento, de cada dimensão e subdimensão das preocupações de carreira. Os índices de média e de correlações item-item e item-dimensão (e subdimensão) apresentaram-se satisfatórios. O resultado do alpha de Cronbach apresentou índices considerados desejáveis (superiores a 0,80), o menor índice observado entre as dimensões foi de 0,90 e nas subdimensões foi de 0,84. Ao analisar o modelo fatorial exploratório, os valores indicaram que todas as correlações parciais estavam adequadas para proceder à análise fatorial exploratória, de tal modo, os resultados confirmaram a unidimensionalidade de cada dimensão. Posteriormente, com a intenção de verificar se as quatro dimensões são realmente compostas por três subdimensões cada, testou-se a validade confirmatória através dos indicadores Quiquadrado, razão entre Qui-quadrado e graus de liberdade, GFI, AGFI e RMS (que foram estimados para a amostra geral e para sexo). Os resultados indicaram estar de acordo com os critérios padrão para a amostra geral e sexo masculino e parcialmente aceitável para o sexo feminino. Assim, o IPCAAt-61 apresentou, fortemente, precisão em suas medidas e que se trata de dimensões consistentes e que avaliou de forma fidedigna aquilo que elas propõem avaliar. Ainda foram exploradas estatísticas descritivas de tendência central, de dispersão e de distribuição da amostra. Finalmente, comparações de médias, com o propósito de verificar a necessidade de criação de tabelas normativas de acordo com os subgrupos de sexo e idade, foram conduzidas. Os resultados obtidos indicaram ser necessário à criação de tabelas normativas diferentes para os subgrupos da amostra, o que efetivamente se fez. / The object of this study is the verification of metric properties (construct validity and internal consistency of) the "Adult Career Concerns Inventory - version for Athletes" (IPCAAt - 61) (Balbinotti and Balbinotti, 2008). This is a list of 61 items (15 items by dimension, and 5 for each subdimension one more item that assesses the projects of a probable change of career). The survey examines four of the five states of career development (the first was ruled out on grounds of age) as the theory of Super (1957). These 4 states and their states sub are presented in order, as follows: holding (crystallization, specification and implementation), establishment (stabilization, consolidation and professional advancement), maintenance (maintaining position, update it and innovate), and disengagement (deceleration, planning for retirement and retired life). 336 athletes participated in this research, Brazilian, both sexes (male, 255, female, 81) with ages ranging from 16 to 56 years, from 16 sports. Ethics of care was taken so that the consent is obtained from all subjects participating in the research. First, the statistics were examined for internal consistency of the instrument, each dimension and subdimension the concerns of their career. The indices of average correlations and item-item and item-scale (and subscale) were satisfactory. Thus, the results of Cronbach's alpha showed indices considered desirable (above 0.80), the lower rate was observed between the dimensions of 0.90 and subdimensions was 0.84. The figures indicated that all the partial correlations were adequate for the exploratory factor analysis, so the results confirmed the unit dimension in each dimension. Later, with the intention to verify whether the four dimensions are actually composed of three subdimension each, it was tested the validity through confirmatory indicators chi-square, ratio of chi-square and degrees of freedom, GFI, AGFI, and RMS (which were estimated for the overall sample and for sex). The results indicated that in accordance with standard criteria for the overall sample and males and partially acceptable for females. Thus, one can assume the validity of the inventory, since the construct validity was established for the total sample and by gender. The IPCAAt-61 shows, strongly, precisely in its measures and dimensions that it is consistent and reliable way of assessing what they offer value. Descriptive statistics were also used for central tendency, dispersion and distribution of the sample. Finally, comparisons of means in order to verify the need for setting up tables in accordance with the normative subgroups of sex and age were conducted.

O objeto deste estudo é a verificação das propriedades métricas (validade de construto e consistência interna) do "Inventário de Preocupações de Carreira de Adulto - versão para Atletas" (IPCAAt 0 - 61) (Balbinotti e Balbinotti, 2008). Trata-se de um inventário de 61 itens (15 itens por dimensão, sendo 5 para cada subdimensão mais um item que avalia os projetos de uma provável mudança de carreira). O inventário analisa quatro dos cinco estados de desenvolvimento de carreira (a primeira foi excluída em razão da idade) conforme a teoria de Super (1957). Estes 4 estados e seus subestados se apresentam, em ordem, como segue: exploração (cristalização, especificação e realização); estabelecimento (estabilização, consolidação e avanço profissional); manutenção (manter posição, atualizar-se e inovar); e desengajamento (desaceleração, planificação da aposentadoria e vida de aposentado). Participaram desta pesquisa 336 atletas, brasileiros, de ambos os sexos (masculino, 255; feminino, 81) com idades variando de 16 a 56 anos, de 16 modalidades esportivas. Cuidados éticos foram tomados de forma que se obteve o consentimento de todos os sujeitos participantes da pesquisa. Primeiramente, foram analisadas as estatísticas de consistência interna do instrumento, de cada dimensão e subdimensão das preocupações de carreira. Os índices de média e de correlações item-item e item-dimensão (e subdimensão) apresentaram-se satisfatórios. O resultado do alpha de Cronbach apresentou índices considerados desejáveis (superiores a 0,80), o menor índice observado entre as dimensões foi de 0,90 e nas subdimensões foi de 0,84. Ao analisar o modelo fatorial exploratório, os valores indicaram que todas as correlações parciais estavam adequadas para proceder à análise fatorial exploratória, de tal modo, os resultados confirmaram a unidimensionalidade de cada dimensão. Posteriormente, com a intenção de verificar se as quatro dimensões são realmente compostas por três subdimensões cada, testou-se a validade confirmatória através dos indicadores Quiquadrado, razão entre Qui-quadrado e graus de liberdade, GFI, AGFI e RMS (que foram estimados para a amostra geral e para sexo). Os resultados indicaram estar de acordo com os critérios padrão para a amostra geral e sexo masculino e parcialmente aceitável para o sexo feminino. Assim, o IPCAAt-61 apresentou, fortemente, precisão em suas medidas e que se trata de dimensões consistentes e que avaliou de forma fidedigna aquilo que elas propõem avaliar. Ainda foram exploradas estatísticas descritivas de tendência central, de dispersão e de distribuição da amostra. Finalmente, comparações de médias, com o propósito de verificar a necessidade de criação de tabelas normativas de acordo com os subgrupos de sexo e idade, foram conduzidas. Os resultados obtidos indicaram ser necessário à criação de tabelas normativas diferentes para os subgrupos da amostra, o que efetivamente se fez. / The object of this study is the verification of metric properties (construct validity and internal consistency of) the "Adult Career Concerns Inventory - version for Athletes" (IPCAAt - 61) (Balbinotti and Balbinotti, 2008). This is a list of 61 items (15 items by dimension, and 5 for each subdimension one more item that assesses the projects of a probable change of career). The survey examines four of the five states of career development (the first was ruled out on grounds of age) as the theory of Super (1957). These 4 states and their states sub are presented in order, as follows: holding (crystallization, specification and implementation), establishment (stabilization, consolidation and professional advancement), maintenance (maintaining position, update it and innovate), and disengagement (deceleration, planning for retirement and retired life). 336 athletes participated in this research, Brazilian, both sexes (male, 255, female, 81) with ages ranging from 16 to 56 years, from 16 sports. Ethics of care was taken so that the consent is obtained from all subjects participating in the research. First, the statistics were examined for internal consistency of the instrument, each dimension and subdimension the concerns of their career. The indices of average correlations and item-item and item-scale (and subscale) were satisfactory. Thus, the results of Cronbach's alpha showed indices considered desirable (above 0.80), the lower rate was observed between the dimensions of 0.90 and subdimensions was 0.84. The figures indicated that all the partial correlations were adequate for the exploratory factor analysis, so the results confirmed the unit dimension in each dimension. Later, with the intention to verify whether the four dimensions are actually composed of three subdimension each, it was tested the validity through confirmatory indicators chi-square, ratio of chi-square and degrees of freedom, GFI, AGFI, and RMS (which were estimated for the overall sample and for sex). The results indicated that in accordance with standard criteria for the overall sample and males and partially acceptable for females. Thus, one can assume the validity of the inventory, since the construct validity was established for the total sample and by gender. The IPCAAt-61 shows, strongly, precisely in its measures and dimensions that it is consistent and reliable way of assessing what they offer value. Descriptive statistics were also used for central tendency, dispersion and distribution of the sample. Finally, comparisons of means in order to verify the need for setting up tables in accordance with the normative subgroups of sex and age were conducted.