Fu, Y. F., Kang, H. H., and Liu, H. C. 2014. Star Funds, Spillover Effect and Fund Advertisements: From the Viewpoint of Individual Funds and Fund Families. NTU Management Review, : 133-174. https://doi.org/10.6226/NTURM2014.OCT.R11021
Ying-Fen Fu, Assistant Professor, Department of Finance, Tainan University of Technology
Hsin-Hong Kang, Professor, Graduate School of Business Administration, National Cheng Kung University
Hai-Ching Liu, Assistant Professor, Department of Finance, Southern Taiwan University of Science and Technology
Abstract
This study adopts the Panel Data Approach and Logistic Regression to examine the effect of fund advertisements from the viewpoint of both individual funds and fund families. Our empirical results show that adopting family advertisements is a good decision both for individual funds and their families. However, there exists a conflict between individual funds when the individual fund advertisement is executed. The individual funds do not respond well to individual fund advertisements of other funds within the same family because it consumes the resources of the family and does not have a spillover effect. One exception is star funds. The individual fund advertisement of star funds not only results in more flows but also has a spillover effect, which thus brings the star funds a higher probability of being individually advertised. As long as the funds are performance (flow) star and winner funds within the whole stock funds or only the performance (flow) star and winner funds within the family, their advertisement probability is raised. This is consistent with the argument that if the funds confirm the benefit of the family, the family may decide to distribute more limited resources to these funds (Chevalier and Ellison, 1997).
Keywords
fund advertisementsstar fundsspillover effect