Rent-Seeking by Mutual Fund Managers: Evidence from Equity Contract Renegotiations

37 Pages Posted: 17 Mar 2011

See all articles by Yongxiang Wang

Yongxiang Wang

University of Southern California - Marshall School of Business

Date Written: February 15, 2011

Abstract

I take advantage of a government announcement that non-tradable shares would become free to trade, but requiring that non-tradable shareholders pay compensation to tradable shareholders. Motivated by the finding that fund ownership negatively affects the compensation received by tradable shareholders in the negotiation over compensation, I present systematic evidence showing that this is likely the result of agency problems among fund managers taking side payments (bribes) from non-tradable shareholders in exchange for poor bargaining outcomes.

Suggested Citation

Wang, Yongxiang, Rent-Seeking by Mutual Fund Managers: Evidence from Equity Contract Renegotiations (February 15, 2011). Available at SSRN: https://ssrn.com/abstract=1787253 or http://dx.doi.org/10.2139/ssrn.1787253

Yongxiang Wang (Contact Author)

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States

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