آیا " رای دادن با اختبار خود" یک مکانیزم موثر در اداره صندوق های سرمایه گذاری متقابل است؟

Investors in open-end mutual funds can vote with their feet by withdrawing assets from or adding assets to these funds. This paper assesses the effectiveness of this market discipline mechanism by investigating whether voting with the feet prevents the abusive practices that led to the 2003–2004 trading scandals. The research results indicate that funds with higher flow sensitivity—that is, a higher density of vigilant clients—have lower arbitrage potential and fewer abnormal flows, which in turn implies less opportunistic trading. As a result, these funds have a lower probability of being implicated in scandals. These findings suggest that investor ability to withdraw assets from or add assets to the funds is an effective mutual fund governance mechanism. In funds with less sophisticated investors who cannot use this option, other means of governance are especially important.

In mutual funds, shareholders are also fund clients, a special organizational structure to which conventional results from corporate governance studies may not apply. Indeed, Fama and Jensen (1983) argue that boards of mutual funds are less important in the management control process than those of nonfinancial corporations because shareholder ability to withdraw resources directly from the fund serves as a form of liquidation. However, individual investors may lack the combination of knowledge and information to monitor funds or the monitoring cost may be too high relative to the benefit. Although the empirical evidence on the effectiveness of this voting with the feet mechanism is scarce and inconclusive,1Gruber, 1996 and Zheng, 1999 show that investors vary in their responses to changes in fund prospects: some monies flow from worse to better prospects; others do not. These findings imply that fund clients are heterogeneous in their monitoring vigilance. This paper therefore investigates investor vigilance in terms of voting with their feet and its influence on fund behavio

This paper is the first to provide direct empirical evidence of Fama and Jensen's (1983) argument that investors' ability to withdraw from or add resources to funds is an effective market monitoring mechanism. Specifically, the results suggest that funds with a higher density of vigilant investors are more likely to reduce arbitrage potential ex ante and engage in less arbitrage trading of fund shares. As a result, they are less likely to be implicated in trading scandals. Overall, these findings suggest that investors' voting with their feet is an effective mechanism for mutual fund governance. For funds with less sophisticated investors unable to use this option, other means of governance, such as boards of directors, become especially important. Without a good measure of such alternative mechanisms, fiduciary failure may occur.