Tournament Behavior in Asian Managed Funds
Vikash Ramiah and Imad Moosa, 445 Swanston St., Melbourne, Vic 3000, Australia, vikash.ramiah@rmit.edu.au; imad.moosa@rmit.edu.au
Abstract
The structure of the Asian managed funds market presents a unique setting to examine the risk-shifting behavior of fund managers. We use Taylor’s (2003) extension of the tournament model of Brown et al. (1996) to examine the risk-taking behavior of Asian fund managers. Taylor’s model shows that using an exogenous (endogenous) benchmark induces losing (winning) managers to gamble, which presents two competing testable hypotheses. We use a sample of Asian funds covering the period 1982–2011 and apply the nonparametric cross-product ratio methodology ...
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