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Purpose The purpose of this paper is to investigate the impact of investor confidence on mutual fund performance in two relatively vulnerable but leading emerging markets, India and Pakistan. Design/methodology/approach A pooled ordinary least squared (OLS) model is used to look at two alternative measures of investor confidence and test for the relationship between investor confidence and mutual fund returns. To check the robustness of the findings, the authors also implement two-stage least squares and generalized method of moments techniques to control for unobserved heterogeneity, simultaneity and dynamic endogeneity problems in the regressors. Findings The paper finds that the returns of mutual funds are positively associated with investor confidence and an interaction effect exists between investor confidence and persistence in performance. The paper also confirms that returns from mutual funds are associated with different fund characteristics such as fund size, turnover, expense, liquidity, performance persistence and the fund’s age. These findings remain robust to alternative model specifications and measures of investor confidence. Originality/value While the previous literature mainly focuses on mutual fund characteristics and the macroeconomic determinants of mutual fund returns, this paper demonstrates that investor confidence plays an important role in determining mutual fund performance. The authors attribute this finding to two relatively unique features of the emerging markets in the study. A lack of awareness of mutual funds as being a low-cost investment vehicle and the interplay of cultural and behavioral changes have prevented investor’s savings from being channeled into investment products, away from gold or property.

Purpose The purpose of this paper is to investigate the stock market response to dividend announcements in high growth emerging markets of Gulf countries. Design/methodology/approach The sample includes 1,092 dividend announcements from 299 listed firms over the period 2010-2015. Findings In the environment where there is an absence of capital gain and income tax, the authors find some evidence for the stock price reaction that partly supports the signaling hypothesis. The findings show that the Gulf Cooperation Council (GCC) market is inefficient because of the leakage information before the announcement in bad news, and the delay of share price adjustment in good news. In addition, the authors report significant trading volume (TV) reaction in all the three announcements clusters, where dividends increase, decrease, and are constant, lending support to the hypothesis that the dividend change announcements have an impact on the TV response due to different investors’ preferences. Originality/value This is the first empirical paper on market reaction in share price and TV around dividend announcement using data for the majority of GCC countries.

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This paper investigates the impact of insider trading and managerial attributes on future stock price crashes. We conduct a series of regressions addressing the managerial attributes determinants of future stock price crashes including gender diversity, CEO age, and CEO power (measured by CEO pay disparity, CEO tenure and CEO duality). Our empirical results reveal a positive association between insider purchases and price crash risk. This implies that other than compensation and career concerns, insiders hoard bad news to fulfil their trading incentives. Our positive coefficients of insider sales also suggest that insider sellers can assess inside information promptly and anticipate shortly before the crashes. We further document that the presence of female directors on boards can mitigate stock price crash risk. However, firms with powerful or younger Chief Executive Officers are more likely to experience crashes. Overall, we highlight the importance of corporate managerial attributes in dealing with information asymmetry problems.