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Evolution of a mutual fund market: Empirical analysis of simultaneous growth and decline by fund category in Indonesia

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  • Narulita, Wista A.
  • Parwada, Jerry T.

Abstract

The mutual fund literature traditionally deals with the growth and decline of the funds management industry in a uni-dimensional, single equation framework. Numerous studies treat mutual fund starts, terminations, inflows, and outflows as independent phenomena. This paper investigates the role of the interdependence between mutual fund inflows and outflows and their determinants in the growth of the emerging Indonesian managed funds market. We find significant replacement and displacement effects between the outflows and inflows of fixed income, equity, and mixed funds. The evidence suggests studies of the development of mutual fund markets should take into account simultaneity between the expansion and declining of different fund categories.

Suggested Citation

  • Narulita, Wista A. & Parwada, Jerry T., 2012. "Evolution of a mutual fund market: Empirical analysis of simultaneous growth and decline by fund category in Indonesia," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 22(5), pages 1217-1236.
    • Handle: RePEc:eee:intfin:v:22:y:2012:i:5:p:1217-1236
    DOI: 10.1016/j.intfin.2012.05.012
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    Cited by:

    1. Cumming, Douglas & Schwienbacher, Armin & Zhan, Feng, 2015. "The scope of international mutual fund outsourcing: Fees, performance and risks," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 38(C), pages 185-199.
    2. Cumming, Douglas & Johan, Sofia & Zhang, Yelin, 2019. "What is mutual fund flow?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 62(C), pages 222-251.

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    More about this item

    Keywords

    Mutual fund; Emerging market; Simultaneous growth; Evolution;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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