On the comparative performance of socially responsible and Islamic mutual funds

This is the first study to provide comprehensive analyses of the relative performance of both socially responsible investment (SRI) and Islamic mutual funds. The analysis proceeds in two stages. In the first, the performance of the two categories of funds is measured using partial frontier methods. In the second stage, we use quantile regression techniques.By combining two variants of the Free Disposal Hull (FDH) methods (order-m and order-?) in the first stage of analysis and quantile regression in the second stage, we provide detailed analyses of the impact of different covariates across methods and across different quantiles. In spite of the differences in the screening criteria and portfolio management of both types of funds, variation in the performance is only found for some of the quantiles of the conditional distribution of mutual fund performance. We established that for the most inefficient funds the superior performance of SRI funds is significant. In contrast, for the best mutual funds this evidence vanished and even Islamic funds perform better than SRI.These results show the benefits of performing the analysis using quantile regression.

On the comparative performance of socially responsible and Islamic mutual funds

This is the first study to provide comprehensive analyses of the relative performance of both socially responsible investment (SRI) and Islamic mutual funds. The analysis proceeds in two stages. In the first, the performance of the two categories of funds is measured using partial frontier methods. In the second stage, we use quantile regression techniques. By combining two variants of the Free Disposal Hull (FDH) methods (order- m and order- α) in the first stage of analysis and quantile regression in the second stage, we provide detailed analyses of the impact of different covariates across methods and across different quantiles. In spite of the differences in the screening criteria and portfolio management of both types of funds, variation in the performance is only found for some of the quantiles of the conditional distribution of mutual fund performance. We established that for the most inefficient funds the superior performance of SRI funds is significant. In contrast, for the best mutual funds this evidence vanished and even Islamic funds perform better than SRI. These results show the benefits of performing the analysis using quantile regression. © 2013 Elsevier B.V.

Do ethics imply persistence? The case of Islamic and socially responsible funds

We analyse the performance persistence of Islamic and Socially Responsible Investment (SRI) mutual funds. We adopt a multi-stage strategy in which, in the first stage, partial frontiers’ approaches are considered to measure the performance of the different funds in the sample. In the second stage, the results yielded by the partial frontiers are plugged into different investment strategies based on a recursive estimation methodology whose persistence performance is evaluated in the third stage of the analysis. Results indicate that, for both types of funds, performance persistence actually exists, but only for the worst and, most notably, best funds. This result is robust not only across methods (and different choices of tuning parameters within each method) but also across both SRI and Islamic funds—although in the case of the latter persistence was stronger for the best funds. The persistence of SRI and Islamic funds represents an important result for investors and the market, since it provides information on both which funds to invest in and which funds to avoid. Last but not least, the use of the aforementioned techniques in the context of mutual funds could also be of interest for the non-conclusive literature.

Health insurance competition in Germany – the role of advertising

In the 1990s, competition among public health insurance funds (‘sickness funds’) was introduced in Germany. As one means of competition, free choice of initial health funds and subsequent switching between them was made available to all insured. Since then, the number of funds has decreased substantially, and funds have had to engage in competitive strategies to remain in the market. In this paper, we want to analyse the funds' advertising activities in the face of the changed competitive environment. This has not been possible to date due to a lack of data. We use two new datasets to get a first insight into the potential effects of competition on funds' advertising strategies; one of the volume and cost of advertisements and one of their contents. Our results suggest that competition has been associated with an increase in the amount of advertising. As to the adverts themselves, we find that there was a decrease in the share of advertisements of a ‘general’ content in favour of advertisements of a more ‘fund-specific’ content. The data therefore indicate that once the market was open to switching of funds by the insured, funds' advertising efforts changed to differentiating their own perceived strengths from those of competitor funds. These observations allow us to draw some tentative conclusions about the relevance of (attempts of) risk selection by health funds via advertisements and about the general success of the pro-competitive legislation.

Implications of restructuring and privatisation for competitiveness and perfomance:two Brazilian steel companies

The thesis examines the effects of the privatisation process on productivity, competitiveness and performance in two major Brazilian steel companies, which were privatised in between 1991 and 1993. The case study method was adopted in this research due to its strengths as a useful technique allowing in-depth examination of the privatisation process, the context in which it happened and its effects on the companies. The thesis has developed a company analysis framework consisting of three components: management, competitiveness/productivity and performance and examined the evidence on the companies within this framework.The research indicates that there is no straightforward relationship between privatisation, competitiveness and performance. There were many significant differences in the management and technological capabilities, products and performance of the two companies, and these have largely influenced the effects of privatisation on each company. Company Alpha's strengths in technological and management capabilities and high value added products explain strong productivity and financial performance during and after privatisation. Company Beta's performance was weak before the privatisation and remained weak immediately after. Before the privatisation, weaknesses in management, commodity type low value added products and shortage of funds for investment were the major problems. These were compounded by greater government interference. Despite major restructuring, the poor performance has continued after privatisation largely because the company has not been able to improve its productivity sufficiently to be cost competitive in commodity type markets. Both companies state that their strategies have changed significantly. They claim to be more responsive to market conditions and customers and are attempting to develop closer links with major customers. It is not possible to assess the consequences of these changes in the short time that has elapsed since privatisation but Alpha appears to be more effective in developing a coherent strategy because of its strengths. Both companies accelerated their programme of organisational restructuring and reducing the number of their employees during the privatisation process to improve productivity and performance. Alpha has attained standards comparable to major international steel companies. Beta has had to make much bigger organisational changes and cuts in its labour force but its productivity levels still remain low in comparison with Alpha and international competitors.

Ownership characteristics and access to finance:evidence from a survey of large privatised companies in Hungary and Poland

We examine financial constraints and forms of finance used for investment, by analysing survey data on 157 large privatised companies in Hungary and Poland for the period 1998 - 2000. The Bayesian analysis using Gibbs sampling is carried out to obtain inferences about the sample companies' access to finance from a model for categorical outcome. By applying alternative measures of financial constraints we find that foreign companies, companies that are part of domestic industrial groups and enterprises with concentrated ownership are all less constrained in their access to finance. Moreover, we identify alternative modes of finance since different corporate control and past performance characteristics influence the sample firms' choice of finance source. In particular, while being industry-specific, the access to domestic credit is positively associated with company size and past profitability. Industrial group members tend to favour bond issues as well as sells-offs of assets as appropriate types of finance for their investment programmes. Preferences for raising finance in the form of equity are associated with share concentration in a non-monotonic way, being most prevalent in those companies where the dominant owner holds 25%-49% of shares. Close links with a leading bank not only increase the possibility of bond issues but also appear to facilitate access to non-banking sources of funds, in particular, to finance supplied by industrial partners. Finally, reliance on state finance is less likely for the companies whose profiles resemble the case of unconstrained finance, namely, for companies with foreign partners, companies that are part of domestic industrial groups and companies with a strategic investor. Model implications also include that the use of state funds is less likely for Polish than for Hungarian companies.

Bureaucratic reform in post-Asian crisis Indonesia:the Directorate General of Tax

Our research examines a key aspect of the extensive bureaucratic reform program that was applied to the Indonesian public sector following the Asian Economic crisis. The organisation we focus on is the Indonesian Directorate of Tax. The reforms moved the case organisation towards more bureaucratic organisational arrangements. The most notable elements of the reforms related to the organisational efficiency and changes in administrative style and culture. An ethnographic approach was adopted, in which the researcher was immersed in the life of the selected case organisation over an extended period of time. This research extends a thin literature on the topic of management control and culture in the Indonesian context. Also, this paper fills a gap in the theoretic approaches for studying bureaucracy, which is dominated by western conceptualisations. This paper provides a reminder to policy makers (including organisation such as the World Bank and the International Monetary Fund) of the consequences of neglecting cultural influences when conducting bureaucratic reform.

Input/output deterioration in production processes

In many real applications of Data Envelopment Analysis (DEA), the decision makers have to deteriorate some inputs and some outputs. This could be because of limitation of funds available. This paper proposes a new DEA-based approach to determine highest possible reduction in the concern input variables and lowest possible deterioration in the concern output variables without reducing the efficiency in any DMU. A numerical example is used to illustrate the problem. An application in banking sector with limitation of IT investment shows the usefulness of the proposed method. © 2010 Elsevier Ltd. All rights reserved.

Neural network DEA for measuring the efficiency of mutual funds

Efficiency in the mutual fund (MF), is one of the issues that has attracted many investors in countries with advanced financial market for many years. Due to the need for frequent study of MF's efficiency in short-term periods, investors need a method that not only has high accuracy, but also high speed. Data envelopment analysis (DEA) is proven to be one of the most widely used methods in the measurement of the efficiency and productivity of decision making units (DMUs). DEA for a large dataset with many inputs/outputs would require huge computer resources in terms of memory and CPU time. This paper uses neural network back-ropagation DEA in measurement of mutual funds efficiency and shows the requirements, in the proposed method, for computer memory and CPU time are far less than that needed by conventional DEA methods and can therefore be a useful tool in measuring the efficiency of a large set of MFs. Copyright © 2014 Inderscience Enterprises Ltd.