The impact of foreign ownership and off-shore investing on technical efficiency: evidence from Chinese managed funds industry
MetadataShow full item record
In a landmark reform in the managed fund industry, China permitted foreign joint ventures as well as off-shore investing. Have these decisions helped improved the efficiency of the industry? We examine this hitherto unexamined question in the literature, using a robust method of efficiency analysis—bootstrap data envelopment analysis. We compute the bootstrap efficiency scores and regress them using truncated regression on environmental variables. We focus on 64 of 69 funds management companies in China from 2003 to 2011 using a unique dataset made available to us. We find that there is considerable room for funds management companies to improve technical efficiency to ultimately bring increased benefits to investors. We find that foreign ownership has not helped efficiency improvement. Similarly, off-shore investing had no impact on technical efficiency. A number of regulatory constraints still persist in China, which makes it hard for the previously measured to yield efficiency gains. We recommend further liberalization of the sector, for example, by removing restriction on distribution of foreign funds.
Showing items related by title, author, creator and subject.
Pojanavatee, Sasipa (2013)Mutual funds are emerging as an opportunity for investors to automatically diversify their investments in such a way that all their money is pooled and the investment decisions are left to a professional manager. There ...
Al Qur'an, Marwan (2005)Research into the location decision of Australian international firms was primarily directed toward investigating motivations of Australian investors for setting up their foreign direct investments (FDI) in specific foreign ...
Ho, Poh-Ling (2008)This study investigates the impact of ownership structure on the extent of voluntary disclosure by Malaysian listed firms over the volatile time period 1996 to 2006. During this period of time, the onset of the 1997 Asian ...