The Concept of Investment Efficiency and its Application to Investment Management Structures

Hodgson, T.M.; Breban, S.J.; Ford, C; Streatfield, Michael; Urwin, Roger

doi:10.1017/s1357321700001884

Cited by 26 publications

(18 citation statements)

References 13 publications

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“…Investment efficiency is a function of risk, return, and total cost of an investment management structure, depending on the limits that can be exercised by investors (Hodgson, Breban, Ford, Streatfield, Urwin, 2000). These limitations include financial and non-financial elements as examples of the time used by investors to manage investment arrangements, accountability, and legislative requirements.…”

Section: Investment Efficiencymentioning

confidence: 99%

“…These limitations include financial and non-financial elements as examples of the time used by investors to manage investment arrangements, accountability, and legislative requirements. In the Hodgson et al (2000) suggests that investment efficiency should consider combining financial efficiency and non-financial efficiency. Biddle, Hillary, and Verdy (2009) states that firms make efficient investments if all their investments have a positive net present value in the absence of agency cost and adverse selection.…”

Section: Investment Efficiencymentioning

confidence: 99%

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The Role of Qualitative Characteristics of Accounting Information on the Investment Efficiency at Manufacturing Companies in Indonesia

Oktorina¹,

Rajagukguk²,

Widyastuti

2018

j.econ.bus.

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This study aims to examine whether the attributes of the quality of accounting information reflect the qualitative characteristics of financial statements and examine the effect of the quality of accounting information on investment efficiency. The attributes of the quality of accounting information are predictability, discretionary revenue, discretionary accruals. Investment efficiency is measured by investment inefficiency as underinvestment and overinvestment. The sample was a manufacturing companies listed on the Indonesia Stock Exchange in 2012 until 2015 as many as 493 observations for examine the attributes of the accounting information quality to form factors that reflect the quality of the financial statements. While the sample of 479 observations used to test the influence of the quality of accounting information against underinvestment. Observation of overinvestment was not analyzed in this study because it has only 14 observations. Data analysis technique used is factor analysis and multiple linear regression. The results showed that the three attributes of the accounting information quality form two factors, the first factor called predictability and the second factor is called discretion. Both of these factors reflect the qualitative characteristics of the accounting information. However, the quality of accounting information measured by these two factors has no significant effect on underinvestment. Likewise, the operating cycle, ROA, and age have no effect on underinvestment. Meanwhile, firm size, tangibility, and dummy loss have a significant effect on underinvestment.

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Section: Investment Efficiencymentioning

confidence: 99%

Section: Investment Efficiencymentioning

confidence: 99%

The Role of Qualitative Characteristics of Accounting Information on the Investment Efficiency at Manufacturing Companies in Indonesia

Oktorina¹,

Rajagukguk²,

Widyastuti

2018

j.econ.bus.

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“…Funds tend to give up financial efficiency for non-financial payoffs. See Hodgson et al (2000) for descriptions of the types of non-financial payoffs which we term theta factors.…”

Section: 5mentioning

confidence: 99%

“…5.2.1 In Hodgson et al (2000) the authors set out the range of manager types to consider, as follows:…”

Section: Types Of Investment Managersmentioning

confidence: 99%

“…". Introduction 1.1 The`investment efficiency' of institutional funds was defined by Hodgson et al (2000). That paper considered the success factors of managing institutional investment funds, and discussed three elements contributing to success: ö the best financial measures of success (principally the net information ratio); ö non-financial influences on decisions and results (principally the influence of regret risk); and ö the linking factor of governance, and how good governance increases the likelihood of financial success.…”

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Risk Budgeting in Pension Investment

Urwin¹,

Breban²,

Hodgson³

et al. 2001

Br. Actuar. J.

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This paper extends the concept of investment efficiency from investment management structures to include strategic asset allocation and liability related issues. The concept of risk budgeting is developed. It represents a valuable way of incorporating risk and return information to produce more efficient investment decisions. Information ratio is a key measurement in the process, and it is concluded that the risk budget should be allocated based upon the marginal contribution to it for different sources of risk. Non-financial risk is also considered in terms of both governance and risk.

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Assets in Pension Funds

Bowie

2004

Encyclopedia of Actuarial Science

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In countries with large scale private and public funded pension arrangements, for example, the United States, Canada, Japan, the Netherlands, and the United Kingdom, one of the key decisions is how the contributions into the fund should be invested to best effect. The investment decision typically results in some form of risk sharing between members and sponsor in terms of (1) the level of contributions required to pay for all promised benefits, (2) the volatility of contributions required, and (3) the uncertainty of the level of benefits actually deliverable should the scheme be wound up or have to be wound up. Some of the risks associated with the pension benefits have a clear link with the economy and hence with other instruments traded in the financial markets. Others, such as demographic risks and the uncertainty as to how members or the sponsor will exercise their options, which are often far from being economically optimal, are less related to the assets held in the fund. This article describes broadly what assets are available to the institutional investor, how an investor might go about deciding on an asset allocation, and explore what the possible consequences of an asset allocation might be.

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The Concept of Investment Efficiency and its Application to Investment Management Structures

Cited by 26 publications

References 13 publications

The Role of Qualitative Characteristics of Accounting Information on the Investment Efficiency at Manufacturing Companies in Indonesia

The Role of Qualitative Characteristics of Accounting Information on the Investment Efficiency at Manufacturing Companies in Indonesia

Risk Budgeting in Pension Investment

Assets in Pension Funds

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