Universität zu Köln

Cici, Gjergji, Hendriock, Mario and Kempf, Alexander (2021). The impact of labor mobility restrictions on managerial actions: Evidence from the mutual fund industry. J. Bank Financ., 122. AMSTERDAM: ELSEVIER. ISSN 1872-6372

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Abstract

We examine how labor mobility restrictions in the form of non-compete clauses in employment contracts affect employee behavior. Using the mutual fund industry as testing laboratory, we show that fund managers respond to higher job termination costs due to increased enforceability of non-compete clauses by increasing their contribution to their employer's revenue. They do so by improving their fund performance, while also increasing window dressing to attract new customers and increase fee revenue. Furthermore, the change in incentives disciplines managers' risk taking, as shown by noticeable reductions in their portfolio risk, portfolio deviations from peers, and engagement in fund tournaments. (C) 2020 Elsevier B.V. All rights reserved.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Cici, Gjergji UNSPECIFIED UNSPECIFIED UNSPECIFIED Hendriock, Mario UNSPECIFIED UNSPECIFIED UNSPECIFIED Kempf, Alexander UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-572309
DOI:	10.1016/j.jbankfin.2020.105994
Journal or Publication Title:	J. Bank Financ.
Volume:	122
Date:	2021
Publisher:	ELSEVIER
Place of Publication:	AMSTERDAM
ISSN:	1872-6372
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language NONCOMPETE AGREEMENTS; COMPENSATION; ENFORCEABILITY; PERFORMANCE; COMPETITION; INCENTIVES Multiple languages Business, Finance; Economics Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/57230