Career Risk and Market Discipline in Asset Management

• 成果类型: Article
• 署名作者: Ellul, Andrew; Pagano, Marco; Scognamiglio, Annalisa
• 署名单位: Indiana University System; IU Kelley School of Business; Indiana University Bloomington; Center for Economic & Policy Research (CEPR); European Corporate Governance Institute; University of Naples Federico II; University of Naples Federico II
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhz062
• 发表日期: 2020
• 页码: 783
• 关键词: HEDGE FUND; gender-gap; performance; finance

摘要

We establish that the labor market helps discipline asset managers via the impact of fund liquidations on their careers. Using hand-collected data on 1,948 professionals, we find that top managers working for funds liquidated after persistently poor relative performance suffer demotion coupled with a significant loss in imputed compensation. Scarring effects are absent when liquidations are preceded by normal relative performance or involve mid-level employees. Seen through the lens of a model with moral hazard and adverse selection, these scarring effects can be ascribed to a drop in asset managers' reputation. The findings suggest that performance-induced liquidations supplement compensation-based incentives.