This thesis comprises three essays on international business strategy with regards to services and technology. The first essay investigates why the average expense ratio paid by Canadian mutual fund investors is 50% higher than that paid in U.S. This discrepancy is commonly thought to exist because Canadian funds do not take advantage of economies of scale and have less competition. A monopolistic competition framework is used to develop a model for the mutual fund industry. By allowing each fund to have different attributes, the model permits funds to charge different expense ratios in equilibrium and is found to strongly fit the North American mutual fund market. Empirical analysis indicates that these two common explanations and measurable fund attributes account for 15% of the discrepancy. The second essay analyses the U.S. mutual fund decision to enter the Canadian market through either foreign direct investment (FDI) or trade in advisement services. The total value of U.S.-controlled funds amounts to 18% of the Canadian equity fund market. This paper investigates how the fund-level and firm-level characteristics affect the channel used to enter the Canadian market. Empirical results indicate that the funds offered through FDI are not especially successful in the U.S. market but are associated with companies with large market shares, whereas the funds offered through trade in advisement services are highly successful in the U.S. market and are from companies with relatively few successful funds. The third essay compares the motivation for acquisition between foreign and domestic acquirers of U.S. drug companies, especially with regard to technology transfer. An estimation of the acquisition decision reveals that foreign acquirers choose targets with high research intensity more as their own intensity decreases while domestic acquirers choose targets with high research intensity more as their own intensity increases. Domestic acquirers' post-acquisition innovative productivity increases mostly due to efficiency of knowledge synthesis because the targets are usually have familiar product lines. Foreign acquirers' innovative productivity does not increase after acquisition because they tend to take over firms in unfamiliar research areas that are usually highly technical and require a long-term commitment of R&D. / Business, Sauder School of / Graduate

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Thesis (MBA)--Stellenbosch University, 2003. / ENGLISH ABSTRACT: Suspicion has long existed that the performance of unit trusts is artificially inflated at quarter-ends, as those are the periods focussed on in the press. Studies investigating this have been done in the USA, but to date no similar study has been done in South Africa. This study examines the daily net asset value (NAV) performances of South Africa's domestic equity funds for the period from 1996 to 2002, as obtained from the MoneyMate database. Specifically, returns in excess of the benchmark index at quarterends are compared to excess returns at other month ends. The benchmark index performance is subtracted to correct for movement in the market. Domestic equity funds are divided into nine sectors and in much of this study, the funds in a sector are examined collectively. Results show that unit trust performance does peak at year-ends and quarter-ends, with a subsequent drop at the start of years and quarters. Furthermore, more funds beat the JSE All Share Index at year-ends and quarter-ends, than is normally the case. In contrast, this pattern was not repeated in the percentage of funds beating zero. Following these results, tests were done to establish whether a relationship exists between an end-of-quarter positive return and a subsequent beginning-of-quarter negative return. The suspected relationship was confirmed specifically in the funds from the period from 2000 to 2002. From this study, it would appear that inflating unit trust performances at quarter-ends is not yet extinct in South Africa. Advice to potential investors would therefore be to invest at the beginning of a quarter and to sell at the end. / AFRIKAANSE OPSOMMING: Daar bestaan lank reeds die vermoede dat die opbrengste van effektetrusts op kwartaaleindes opwaarts bestuur word, siende dat dit die opbrengste is wat dekking in die media geniet. Daar is al in die VSA studies gedoen wat hierdie vermoede ondersoek, maar tot op hede was daar nog geen soortgelyke studie in Suid-Afrika nie. Hierdie studie ondersoek die daaglikse opbrengste van die netto batewaarde van Suid- Afrika se binnelandse effektetrusts vir die tydperk 1996 tot 2002, soos verkry van die databasis MoneyMate. Die verskil tussen opbrengste van die effektetrusts en die indeks op kwartaaleindes is vergelyk met die verskil op ander maandeindes (die verskil tussen opbrengste is geneem om bewegings in die mark in ag te neem). Plaaslike effektetrusts word in nege sektore verdeel, en in die grootste deel van hierdie studie word die effektetrusts in 'n sektor as 'n geheel ondersoek. Resultate toon dat effektetrusts opbrengste wel pieke toon op jaareindes en kwartaaleindes, en dan weer val in die begin van jare en kwartale. Verder is daar ook meer effektetrusts wat beter vaar as die JSE Alle Aandele Indeks op jaareindes en kwartaaleindes as wat normaalweg die geval is. In kontras word hierdie patroon nie herhaal as gekyk word na die persentasie van effektetrusts wat nul klop nie. Na aanleiding van hierdie resultate is toetse gedoen om vas te stel of daar 'n verband bestaan tussen positiewe opbrengste op kwartaaleindes en die daaropvolgende negatiewe opbrengste aan die begin van kwartale. Hierdie verband is veral gevind vir die tydperk 2000 tot 2002. Uit hierdie studie wil dit blyk dat, in Suid-Afrika, die opbrengste van effektetrusts op kwartaaleindes wel kunsmatig verhoog word. Raad aan voornemende beleggers sou dus wees om aan die begin van 'n kwartaal te koop, en aan die einde te verkoop.

In this thesis, the regime dependent mean and abnormal returns are studied to examine whether socially responsible mutual funds have a different performance from traditional mutual funds, since there may be different patterns in the economy. Five economic factors - stock returns, treasury yield spread, credit spread, economic confidence and building permits - are used to identify the market regimes, which are determined as bear and bull markets. The regime-dependent abnormal returns are calculated with a regime-switching Fama & French three factor asset-pricing model. The empirical results show that socially responsible mutual funds have statistically higher mean return than non-socially responsible mutual funds in both bear and bull markets. However, using the measurement of the abnormal returns, socially responsible mutual funds statistically underperform non-socially responsible mutual funds in bull market, while the performance of the two types of funds are not statistically differentiable in the bear market.

by Chan Wing Tai, Chu Yee Wah, Yewa. / Thesis (M.B.A.)--Chinese University of Hong Kong, 2000. / Includes bibliographical references (leaves 77-80). / Abstract --- p.2 / Chapter Chapter I --- Introduction --- p.3 / Chapter Chapter II --- Literature Review & Methodology / Literature Review --- p.5 / Methodology --- p.6 / Chapter Chapter III --- Asian Financial Crisis / Causes of Crisis --- p.7 / Economic Impacts of the Crisis --- p.9 / Lessons for the Affected Economies --- p.11 / Lessons for Non-affected Economies --- p.12 / The Asian Economy --- p.13 / Impacts of Asian Financial Crisis on Countries --- p.16 / Chapter Chapter IV --- Mutual Fund and Asia Crisis / Introduction to Mutual Fund --- p.24 / Regional Economic Environment after Crisis --- p.25 / Asset Allocation of Mutual Fund --- p.37 / Impacts of Asian Financial Crisis on Mutual Fund --- p.44 / Mutual Fund Facts Before and After Crisis --- p.50 / Mutual Fund Performance Before and After Crisis --- p.54 / Asian Markets Outlook --- p.62 / Perspective in Asia Pacific Funds --- p.66 / Recommendation & Conclusion --- p.68 / Appendix --- p.70 / Bibliography --- p.77

by Ip Sum-Sum. / Thesis (M.B.A.)--Chinese University of Hong Kong, 1998. / Includes bibliographical references (leaves 36-37). / ABSTRACT --- p.ii / TABLE OF CONTENT --- p.iv / LIST OF CHARTS/ TABLES --- p.v / Chapter CHAPTER I --- INTRODUCTION --- p.1 / Definition of Channel Management --- p.1 / Critical Success Factor of Channel Management --- p.2 / Objective of the Study --- p.5 / Methodology --- p.7 / Research Design --- p.7 / Limitation --- p.8 / Chapter CHAPTER II --- INDUSTRY BACKGROUND --- p.9 / The Unit Trust / Mutual Funds Industry in Hong Kong --- p.9 / Definition of Unit Trusts/ Mutual Funds --- p.10 / Unit Trusts Business Growth --- p.10 / Chapter CHAPTER III --- CHARACTERISTICS OF THE UNIT TRUSTS DISTRIBUTION CHANNEL --- p.13 / Three Level Conventional Marketing Channel --- p.13 / Multi-Relationships in Channel Management --- p.14 / Clear Division of Work and Responsibilities --- p.16 / Marketing Cooperation --- p.16 / Transactions Handling and Servicing --- p.18 / Commission Based Revenue Sharing Mechanism --- p.18 / Chapter CHAPTER IV --- EVALUATION OF THE EXISTING UNIT TRUSTS CHANNEL --- p.20 / Cost Perspective --- p.20 / Cost Effectiveness to Tackle the Mass Market --- p.20 / Customer Base Leveraging --- p.21 / "Standard Products, Standard Price" --- p.22 / Adaptation Perspective --- p.23 / Flexibility in Alignment with Business Strategies --- p.23 / Control Perspective --- p.24 / Control in Communication --- p.24 / Possible Differences in Business Priorities --- p.25 / Business Flexibility Being Limited --- p.27 / Chapter CHAPTER V --- DILEMMA IN THE EXISTING CHANNEL MANAGEMENT --- p.28 / Chapter CHAPTER VI --- HINDRANCES TO THE INDUSTRY - OTHER FACTORS --- p.30 / Overall Investment Environment --- p.30 / Hong Kong Investors' Attitude --- p.30 / Regulatory Regime --- p.31 / Chapter CHAPTER VII --- RECOMMENDATIONS --- p.32 / Focused Approach in Distribution Relationship --- p.32 / Focused Approach in Target Segment --- p.32 / Strategic Alliance --- p.33 / Technology- Led Information Delivery --- p.33 / Periodic Checks with the Distributors --- p.34 / Product Development According to the Needs of Distributors --- p.34 / Chapter CHAPTER VIII --- SUMMARY AND CONCLUSION --- p.35 / BIBLIOGRAPHY --- p.36

This research is a systematic, in depth empirical test of the strong form of the efficient market hypothesis (EMH) using the dual-fund industry as the research subject. Unlike most strong-form EMH research, this study deals with a small, homogeneous sector of the investment company industry with a comparable origin date. To obtain homogeneity of the research subjects, the sample size is necessarily small (7), thus, making it difficult to find statistically significant results. In general, portfolio performance is negatively correlated with variability in measures of portfolio characteristics such as the major mix, common stock categories, portfolio turnover, etc. The better-performing dual funds were more consistently managed while the lower-performing companies had significant and sometimes frequent changes in portfolio policies. In line with the efficient market hypothesis, "passive" management, i.e., low turnover, few changes in major mix or common stock composition, shows better results in the dual-fund industry from inception through 1973.

In the seven decades following the Investment Company Act of 1940 coming into force in the United States, the mutual fund industry has undergone dramatic changes including, some argue, a transition from stewardship to salesmanship with asset-gathering becoming the industry’s driving force. As fund managers incrementally assumed a more pronounced role in the investment fund industry, an emerging strand of finance literature focused on their characteristics and their potential impact on investment performance. While a large body of academic research concurs that fund managers cannot outperform systematically better than chance, there are also a significant number of studies that link the psychological characteristics of investors to their investment performance. Importantly, we know that fund managers, as a representative sample of professional investors, often have to operate under enormous anxiety and associated psychic pressures. In their effort to cope with these pressures and make sense of an immensely unpredictable and complex work environment, a wide range of psychic defences and behavioural biases may be triggered. The purpose of this research is to investigate, on the one hand, to what extent mutual fund managers are prone to overconfidence and associated behavioural biases such as self-serving attribution. On the other hand, the extent to which overconfidence, proxied by a wide range of variables including overoptimism, excessive certainty and excessive self-reference, may have any bearing on fund performance is of interest. The fundamental question is why, how, and through which mechanisms does overconfidence affect performance. The underlying research questions are motivated by three large areas of research: studies of mutual fund performance and persistence, studies of financial accounting narratives, and studies of professional investor psychology. I also explore how overconfidence is fundamentally generated and, in a sense, resorted to by fund managers as a defence mechanism against the psychic pressures of having to work in a highly intangible, complex and uncertain environment. Drawing on evidence from fund manager reports written for investors, I explain how they use the medium of narratives, and in particular stories, to make sense of what they do as fund managers and their added value for clients. I demonstrate how analysing fund manager commentaries, both through computer-assisted corpus-linguistic approaches and through the “close reading” method, sheds light on the link between fund manager psychology and investment performance. In particular, from the perspective of narrative analysis, I explain how fund managers write their reports in distinguishably different genres depending, among others, on their past performance record, fund size and investment style. In addition, I establish in a longitudinal study that the overall economic environment in which fund managers operate does influence the rhetoric of fund manager reports as well as the evidence for the Pollyanna hypothesis. My findings also suggest that excessive overconfidence is associated, to a large extent, with diminished future investment returns. While superior past returns are expected to increase fund manager confidence which, in turn, may introduce the overconfidence bias in the investment decision-making process and thus diminish returns (through inefficient stock selection, suboptimal market timing and other possible mechanisms), this is not a simple regression towards the mean. The asset pricing model employed in my empirical analysis, the Carhart four-factor model, controls for the effect of previous-year momentum, and my overconfidence measures are only slightly correlated with the momentum figures. Hence, one is led to the conclusion that the narrative-based variables used in this study indeed capture some aspect of the professional investor psychology, and are capable of enhancing the explanatory power of conventional asset-pricing models such as Carhart’s. In investigating the dynamic relationship between fund manager overconfidence and investment performance, the cross-sectional variations in my study demonstrate that superior past performance boosts overconfidence as measured by all proxies employed. In addition, there appears to be an inverted-U relationship between overconfidence and subsequent investment performance. In particular, a hedging strategy based on shorting funds with extremely overconfident managers and going long in funds with normally (over)confident managers, yields positive average returns. The impact of overconfidence on subsequent returns is robust across different investment styles, although it is stronger among growth-oriented funds. Incorporating average scores for fund manager overconfidence over longer periods yields similar results. In addition, fund manager duration appears to correlate with managerial overconfidence in the long term.

published_or_final_version / Business Administration / Master / Master of Business Administration

The first essay of this dissertation investigates the relationship between downside risk and returns of real estate investment trusts (REITs) and assesses the performance of real estate mutual funds (REMFs). We measure the asymmetric risk through downside and upside betas and through the measures incorporated higher moments such as coskewness and Leland's beta. We do not find significant contemporary relationship between the asymmetric risk and returns of REITs. There are only a small portion of REITs reacting to up and down market conditions differently. We find weak evidence that this asymmetric movement of REITs to market may be due to small and value components embedded in REITs. We evaluate the performance of real estate mutual funds (REMFs) from the asymmetric risk perception. According to our results, most of REMFs do not outperform the market. The downside risk helps to explain some of the abnormal returns associated with REMFs. However, the evaluation may be sensitive to the choices of the model and the market index being used. The second essay examines the liquidity of Asian REITs. We use various measures to assess the liquidity of JREITs and SREITs. The overall evidence indicates that the liquidity of JREITs is greater than that of SREITs. Comparing to non-REIT stocks, JREITs are less liquid than Japanese common stocks while there is no significant difference in liquidity between SREITs and Singaporean common stocks. There is also strong evidence that US REITs have smaller spreads and are traded more often than both JREITs and SREITs. We also find that the primary determinants of JREIT spreads are turnover and return volatility. The secondary factors that affect the spread of JREITs are life and property holdings. The dominant factors affecting SREITs' spreads are price, return volatility, and life. The significance of life suggests that there is a learning effect existed in both JREIT and SREIT markets in 2005.