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Determinants of Development of the Mutual Fund Industry. A Socio-Cultural Approach

Author

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  • Ingrid-Mihaela Dragotă
  • Delia Tatu-Cornea
  • Narcis Tulbure

Abstract

The mutual fund industry has grown considerably in many countries since the 1990s. Its evolution has been explained primarily in terms of its economic and financial determinants. We draw on a dynamic set of measures for socio-cultural values to explain the differential development of mutual funds across the world. Using a sample of 38 countries for the period 1996-2009, we find a positive relation between the perception of happiness and the size of the mutual fund industry. Freedom of choice, a feature of countries that are dominated by individualistic behaviours and values, has a positive impact on the development of the industry. We also explain the positive relation between individuals' preference for private ownership and the development of mutual funds. Moreover, we prove that the industry is larger in developed countries with greater stock market liquidity, with low ratios of remittance inflows to GDP, and in which the industry is older.

Suggested Citation

  • Ingrid-Mihaela Dragotă & Delia Tatu-Cornea & Narcis Tulbure, 2016. "Determinants of Development of the Mutual Fund Industry. A Socio-Cultural Approach," Prague Economic Papers, Prague University of Economics and Business, vol. 2016(4), pages 476-493.
    • Handle: RePEc:prg:jnlpep:v:2016:y:2016:i:4:id:572:p:476-493
    DOI: 10.18267/j.pep.572
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    References listed on IDEAS

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    1. Charles Amo Yartey, 2008. "The Determinants of Stock Market Development in Emerging Economies: Is South Africa Different?," IMF Working Papers 2008/032, International Monetary Fund.
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    Cited by:

    1. Claudia Nadler & Wolfgang Breuer, 2019. "Cultural Finance as a research field: an evaluative survey," Journal of Business Economics, Springer, vol. 89(2), pages 191-220, March.
    2. Marszk, Adam & Lechman, Ewa, 2021. "Reshaping financial systems: The role of ICT in the diffusion of financial innovations – Recent evidence from European countries," Technological Forecasting and Social Change, Elsevier, vol. 167(C).
    3. Mihaela BRODOCIANU, 2019. "The Impact of Institutional Investors on Economic Growth of European Countries," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(21), pages 112-119, November.
    4. Dariusz Filip, 2018. "The impact of fund attributes on performance: Empirical evidence for Polish equity funds," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(2), pages 465-488.

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    More about this item

    Keywords

    socio-cultural values; mutual funds; financial development;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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