Ability to sell mutual funds are more efficient than portfolio management skills.

What is it about?

DEA (Data Envelopment Analysis) evaluation of the efficiency of a sample of mutual fund companies in a large Euro fund industry. The novel network model links the efficiency of the core activities (portfolio management and marketing/distribution) of a mutual fund company to the efficiency of its operational management function.

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Why is it important?

The assumptions of our approach incorporates the responsibility of a company to its shareholders as a generalizable and innovative contribution to the efficiency models of mutual fund companies (family companies). Our results highlight the important networking effects at the marketing stage and question the prime role of portfolio management skills in the overall efficiency of a mutual fund company. Based on the efficiency rankings drawn by our network model, we find asignificant persistence phenomenon for all the management stages and years, although less significance is observed following the financial crisis.

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