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Volume 18, Numbers 1 & 2 / March/June 2014 , Pages 1-167
Multinational Finance Journal, 2014, vol. 18, no. 1/2, pp. 1-41 |
Mihail K. Miletkov , University of New Hampshire, USA    Corresponding Author

The governments which undertake privatization of their state owned enterprises often maintain some ownership in the newly privatized firms. This paper examines the effect of the presence of the government as a minority shareholder on the protection of the minority shareholders in privatized firms. Consistent with the government’s incentive to foster security market development and to enlist the support of the median-class voters for the privatization process we find that the government effectively monitors the controlling shareholders in the newly privatized firms and curbs their ability to expropriate the minority shareholders. Furthermore, the evidence suggests that minority government ownership acts as a substitute for the lack of alternative mechanisms for minority shareholder protection.

Keywords : privatization; private benefits of control; government ownership; investor protection
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Multinational Finance Journal, 2014, vol. 18, no. 1/2, pp. 43-84 |
Zhichao Zhang , Durham University, UK
Li Ding , Durham University, UK
Si Zhou , Durham University, UK    Corresponding Author
Yaoyao Fu , Durham University, UK

By applying tournament analysis to the UK Unit Trusts data, the results support significant risk shifting in the family tournament; i.e. interim winning managers tend to increase their level of risk exposure more than losing managers. It also shows that the risk-adjusted returns of the winners outperform those of the losers following the risk taking, which implies that risk altering can be regarded as an indication of managers’ superior ability. However, the tournament behaviour can still be a costly strategy for investors, since winners can be seen to beat losers in the observed returns due to the deterioration in the performance of their major portfolio holdings.

Keywords : mutual fund family; fund performance; tournament; risk taking
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Multinational Finance Journal, 2014, vol. 18, no. 1/2, pp. 85-138 |
Nikolaos Philippas , University of Piraeus, Greece    Corresponding Author

This study examines the performance of mutual funds that employ investment strategies based on the principles of behavioral finance, collectively known as “behavioral mutual funds”. A series of performance measures is employed in order to test whether behavioral mutual funds outperform the stock market, their benchmarks or passively managed index funds, using monthly data for the period January 2007-March 2013. Results from the full sample and subperiod analysis show that behavioral mutual funds actually exhibited poor performance, both during the recent financial crisis and in its aftermath, rejecting the conjecture that the crisis period would provide an ideal environment for their strategies to be profitable by exploiting market inefficiencies and investors behavioral biases.

Keywords : behavioral mutual funds, financial crisis, market inefficiencies, performance evaluation
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Multinational Finance Journal, 2014, vol. 18, no. 1/2, pp. 139-167 |
Håkan Jankensgård , Lund University, Sweden    Corresponding Author

According to the cost-of-capital hypothesis, increased voluntary disclosure should reduce information asymmetries, lower the cost of capital, and increase firm value. The optimal-disclosure hypothesis, however, predicts that costs related to voluntary disclosure lead to the existence of an interior optimum of disclosure that maximizes firm value. These hypotheses are empirically tested using a previously unexplored database that covers disclosure rankings for listed Swedish firms between 2007 and 2012 (rendering around 1000 firm-years). The evidence is consistent with the optimal-disclosure hypothesis. I find a robust quadratic relationship between Tobin’s Q and the level of disclosure in annual reports. I find no significant relationship, however, between Tobin’s Q and disclosure in quarterly reports or web-based reporting.

Keywords : voluntary disclosure, cost of capital, Tobin
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