麻豆淫院

(麻豆淫院) -- U.S. laws and regulations on investment management address potential conflicts of interest between investors and managers through disclosure requirements. Surprisingly little is known about the effectiveness of these standards in resolving such conflicts, says Greg Kadlec, R.B. Pamplin Professor of Finance in the Pamplin College of Business.

Kadlec co-authored a recent study that offers new empirical evidence on the role of disclosure, finding that greater transparency about a fund鈥檚 operating expenditures lowers the fund鈥檚 conflicts of interest and improves return performance.

Agency conflicts can arise whenever people delegate control of assets to others, Kadlec says. A particularly important agency conflict exists between shareholders and managers of a corporation. 鈥淪hareholders want managers to maximize the value of the corporation, whereas managers want to maximize their own welfare. This conflict can result in managers acting inefficiently or even corruptly with respect to the shareholders鈥� interest.鈥�

The colossal failures of Drexel Burnham Lambert, Enron, Lehman Brothers, and the Madoff fund, he says, 鈥渁ll stem from agency conflict.鈥� Anticipating and resolving these conflicts improves the efficiency of corporations and capital allocation in the economy.

In their study, Kadlec and his co-authors Roger M. Edelen, of the University of California, Davis, and Richard Evans, of the University of Virginia, investigate the role of disclosure in mutual fund agency conflicts by examining the two different ways that fund managers can pay for operating costs 鈥� approaches that differ greatly in transparency 鈥� and comparing their effects on return performance.

Their study, 鈥淒isclosure and Agency Conflict: Evidence from Mutual Fund Commission Bundling,鈥� is published in the Journal of Financial Economics, 2012, 103, 308-326.