Chair of Corporate Governance Prof Dr Alexandra NiessenRuenzi

Chair of Corporate Governance Prof. Dr. Alexandra Niessen-Ruenzi, Mengqiao Du, Chia-Yi Yen Master theses topics FSS 2019

Organization • All necessary information (including topic descriptions) can be found on our website https: //www. bwl. uni-mannheim. de/niessen-ruenzi/. • Advisor: Mengqiao Du, mengqiao. du@uni-mannheim. de Chia-Yi Yen, cyen@mail. uni-mannheim. de Chair of Corporate Governance 2

What are the prerequisites? • You are a master student. • You must have successfully completed a seminar at one of the finance chairs (Albrecht, Maug, Niessen-Ruenzi, Terberger, Theissen, Weber). • Some knowledge of statistics and econometrics is useful and participants should be motivated to undertake empirical work. • You are available in the time period from March to July. Chair of Corporate Governance 3

Time-line • Please pay attention to the deadlines on the website of Finance area! Chair of Corporate Governance 4

Colloquia • There will be two block seminars – Tue. , May 14, 2019 – Wed. , June 26, 2019 • The block seminars provide a platform to discuss the structure of your thesis, present (first) empirical results, raise questions, and to further stimulate your research. • The colloquia are not graded. • Participation in the block seminars is mandatory for all students. Chair of International Finance 5

How to apply? • Submit your priority list online. • You can combine topics from different chairs, e. g. : – First preference: “ 3 rd Topic, Chair of Prof. Niessen-Ruenzi”; – Second preference: “ 10 th Topic, Chair of Prof. Weber”; – Third preference: “ 4 th Topic, Chair of Prof. Theissen” • Please only choose topics you are really willing to work on. • The allocation of topics is based on the grade in one of the seminars of the Finance Area and your priority list from the master thesis application form. Chair of International Finance 6

How do we grade? • Supervision of thesis by Prof. Niessen-Ruenzi and the assigned advisor. • 100% paper • The colloquia are not graded. • Plagiarism: no excuse policy Chair of International Finance 7

How should your thesis look like? • ~50 pages (without appendix) • Language: English • Detailed formal requirements: see the guidelines provided on our website (same as for the Chair of International Finance) Chair of International Finance 8

TOPIC NR 1: Pretend to be kind? Stock Holdings and Trading by Socially Responsible Mutual Funds • • Advisor: Mengqiao Du Background: – Socially responsible investments (SRIs) are increasing in economic and financial importance, as demonstrated by their growing volume. Riedl and Smeets (2017) find that investors are willing to forgo financial performance in order to invest in accordance with their social preferences. – However, do SRIs truly comply with the social principles as they claim? Are SRIs really socially responsible? Goals: – Examine how actively SRI funds trade and whether their trades relate to the social factor of the firms – Whether SRI tend to manipulate their portfolio snapshots more than other funds – Test whether fund investors react to the trading behavior of SRI funds by examining the flows to SRI funds Introductory Literature: – Agarwal, V. , Gay, G. D. , & Ling, L. (2014). Window dressing in mutual funds. The Review of Financial Studies, 27(11), 3133 -3170. – Cremers, K. M. , & Petajisto, A. (2009). How active is your fund manager? A new measure that predicts performance. The Review of Financial Studies, 22(9), 3329 -3365. – El Ghoul, S. , & Karoui, A. (2017). Does corporate social responsibility affect mutual fund performance and flows? . Journal of Banking & Finance, 77, 53 -63. Chair of Corporate Governance 9

TOPIC NR 2: Economic conditions, social networks, and managers’ career: evidence from the mutual fund industry • • Advisor: Mengqiao Du Background: – Given the significant role mutual funds play on financial markets, it is important to understand talent allocation and career development in the mutual fund industry. – Schoar and Zuo (2017) find that in industrial companies, managers who began their careers during recessions become CEOs more quickly, but at smaller firms. – Cohen et al. (2008) find that portfolio managers place larger bets on connected firms and perform significantly better on these holdings relative to their non-connected holdings. Goals: – Examine how economic conditions and social networks influence fund managers’ career and more generally, the overall investment capabilities of different cohorts in the mutual fund industry Introductory Literature: – Cohen, L. , Frazzini, A. , & Malloy, C. (2008). The small world of investing: Board connections and mutual fund returns. Journal of Political Economy, 116(5), 951 -979. – Schoar, A. , & Zuo, L. (2017). Shaped by booms and busts: How the economy impacts CEO careers and management styles. The Review of Financial Studies, 30(5), 1425 -1456. Chair of Corporate Governance 10

TOPIC NR 3: Copycat funds and the transparency of holding information • • Advisor: Chia-Yi Yen Background: – One may argue that more transparent holding information is likely to induce more copycatting behavior. – Existing evidence: • Verbeek and Wang (2013) : in 2004, when funds started to report quarterly • Cao et al. (2018): in 2013, when holdings info has to be filed in XBL format Goals: – Replicate the findings of Verbeek and Wang (2013) and provide new evidence – By looking into a natural experiment in 1999, when holing info first became available online, instead of in paper format – Develop and test own hypotheses relevant to this topic Introductory Literature: – Cao, Sean, et al. "Copycatting and Public Disclosure: Direct Evidence from Peer Companies’ Digital Footprints. " Available at SSRN 3280744 (2018) – Verbeek, Marno, and Yu Wang. "Better than the original? The relative success of copycat funds. " Journal of Banking & Finance 37. 9 (2013): 3454 -3471. Chair of Corporate Governance 11

TOPIC NR 4: Ownership of fund insiders, risk-taking, and tax burdens • • Advisor: Chia-Yi Yen Background: – Ownership of fund managers (or directors): to align incentives with fund shareholders • Ma and Tang (2018): fund manager ownership -> less agency-induced risk-taking in portfolio holdings – However, there may be “locked-in” effect due to tax burden, as in Yost (2017): • CEOs are reluctant to realize capital gain to avoid paying tax • CEOs over-expose to firm-specific risk. • As a result, they will reduce firms’ risk and hence limit their personal risk. – Does “locked-in” effect exist for mutual fund managers? Goals: – Conduct a comprehensive survey of the relevant literature. – Examine how unrealized tax burden of fund managers influence fund-level riskiness. – Develop and test own hypotheses relevant to this topic. – Coding in Python/R is necessary (for web-crawling data from EDGAR website) Introductory Literature: – Ma, Linlin, and Yuehua Tang. "Portfolio manager ownership and mutual fund risk taking. " (2018). Management Science, forthcoming – Yost, Benjamin P. "Locked-In: The Effect of CEOs' Capital Gains Taxes on Corporate Risk. Taking. " The Accounting Review (2017). Chair of Corporate Governance 12