Hedge Fund Innovation
Marcin Zamojski (VU University Amsterdam)
We study hedge fund innovation by clustering hedge funds based on their asset instruments, sector and investment focus, and fund details. We find that early entry in a cluster is associated with higher excess returns, longer survival, higher incentive fees and lower management fees compared to funds that arrive later. Moreover, the latest entrants have a high loading on the returns of the innovators, but with lower incentive fees, and higher management fees. The results are robust to different parameters of clustering and backfill-bias. The existence of the imitators suggests that there is a market for unskilled hedge fund managers that largely copy successful innovators.
The Role of Child Maltreatment on Illegal Behavior
Violeta Misheva (EUR)
We use Australian twin data to investigate the effect of physical and sexual child abuse on drug abuse, drug dependence, conduct disorder and criminal activity in adulthood. We employ Ordinary Least Squares and twin fixed effects exploring the within-twin variation in the abuse and our results using either method of estimation confirm the hypothesis that child abuse leads to illegal behavior. We also find evidence that the more severe type of abuse leads to worse outcomes and that the perpetrator of sexual abuse is also important for the problematic behavior of interest. We further establish gender differences in the effect of physical and sexual abuse on the outcomes with sexual abuse having a positive and statistically significant effect for the illegal behavior of women but not of men. Our twin-fixed effects estimates do not entirely solve the existing problems in establishing a causal effect of child maltreatment on the illegal behavior of interest, but we believe it is still the best attempt in the literature to approach this important and largely neglected by economists problem.