Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/57742
Authors: 
Kempf, Alexander
Ruenzi, Stefan
Thiele, Tanja
Year of Publication: 
2008
Series/Report no.: 
CFR Working Paper 07-02
Abstract: 
We examine the influence on managerial risk taking of incentives due to employment risk and due to compensation. Our empirical investigation of the risk taking behavior of mutual fund managers indicates that managerial risk taking crucially depends on the relative importance of these incentives. When employment risk is more important than compensation incentives, fund managers with a poor midyear performance tend to decrease risk relative to leading managers to prevent potential job loss. When employment risk is low, compensation incentives become more relevant and fund managers with a poor midyear performance increase risk to catch up with the midyear winners.
Subjects: 
Managerial Risk Taking
Employment Risk
Compensation Incentives
Mutual Funds
Restrictions
JEL: 
G23
M54
Document Type: 
Working Paper

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