What is the Wind Behind the Sails to Go Abroad? Empirical Evidence from the Mutual Fund Industry

40 Pages Posted: 26 Apr 2013

See all articles by Gunnar Lang

Gunnar Lang

ZEW

Henry Schaefer

University of Stuttgart - Institute of Business Management

Date Written: 2013

Abstract

Specific industry factors determining cross-border business set-up in the European mutual fund industry are analyzed to contribute to the understanding of production specificities in the financial industry. The findings indicate that the decision on where to domicile a fund is not primarily driven by traditional cost factors, such as registration charges and labor costs. Network conditions with respect to the knowledge-based production process of mutual funds and the interaction with regulating authorities such as the approval process embedded in the legal framework and the quality of the workforce in a dense specialized cluster matter most. Differences in such network conditions may allow fund companies to set up more innovative and complex funds in a shorter period of time in one country than in other countries. The findings highlight also that the practitioners agree on such network determinants as being most important.

Keywords: Mutual Funds, Business Location Decision, Financial Regulation, Networks in Capital Markets

JEL Classification: D22, F36, G15, G28

Suggested Citation

Lang, Gunnar and Schaefer, Henry, What is the Wind Behind the Sails to Go Abroad? Empirical Evidence from the Mutual Fund Industry (2013). ZEW - Centre for European Economic Research Discussion Paper No. 13-022, Available at SSRN: https://ssrn.com/abstract=2256529 or http://dx.doi.org/10.2139/ssrn.2256529

Gunnar Lang (Contact Author)

ZEW ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Henry Schaefer

University of Stuttgart - Institute of Business Management ( email )

Keplerstraße 17
Stuttgart, Baden Wuerttemberg 70174
Germany
++49 (0)711/218460-00 (Phone)
++49 (0)711/218460-09 (Fax)

HOME PAGE: http://www.uni-stuttgart.de/finance

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