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Journal article

Open-end organizational structures and limits to arbitrage

Abstract:

We provide evidence that open-end organizational structures undermine incentives for asset managers to attack long-term mispricing. We compare open-end funds with closed-end funds. Closed-end funds purchase more underpriced stocks than do open-end funds, especially if the stocks involve high arbitrage risk. We then show that hedge funds with highshare restrictions having a lower degree of open-endedness also trade against long-term mispricing to a larger extentthan do other hedge funds. Our a...

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Publication status:
Published
Peer review status:
Peer reviewed

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Publisher copy:
10.1093/rfs/hhx057

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Institution:
University of Oxford
Division:
Societies, Other & Subsidiary Companies
Department:
Kellogg College
Oxford college:
Kellogg College
Role:
Author
Publisher:
Oxford University Press Publisher's website
Journal:
Review of Financial Studies Journal website
Volume:
31
Issue:
2
Pages:
773–810
Publication date:
2017-07-10
Acceptance date:
2017-03-10
DOI:
EISSN:
1465-7368
ISSN:
0893-9454
Keywords:
Pubs id:
pubs:685555
UUID:
uuid:5daaacd5-dd28-4a3a-b459-2218029af8b0
Local pid:
pubs:685555
Source identifiers:
685555
Deposit date:
2017-03-14

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