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Institutional and Socio-Cultural Factors Explaining the Development of Mutual Funds. A Cross-Country Analysis

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  • Tulbure, Narcis
  • Catarama, Delia

Abstract

This paper explores the institutional and socio-cultural factors explaining the differential development and growth rates of the mutual fund industry in a sample of 41 countries. It draws on multivariate OLS regressions. It shows that the development of mutual funds is influenced positively by regulatory quality and economic and financial system development, but it is negatively related to the presence of a Lamfalussy type regulatory framework (as in all member states of the European Union). Also, widespread belief in work as the legitimate source of monetary gain seems to be negatively associated with mutual fund development. The growth rates of national mutual fund industries are negatively related to general economic development. The negative coefficient of the variable coding for regulatory quality indicates that a poorer regulation of the field (when compared to the developed countries) does not necessarily inhibit growth, especially in the case of young industries. Lamfalussy regulations do not have any significant effect on mutual fund growth. At the same time, mutual fund industries have grown most rapidly in countries with high percentages of Muslim and Christina Orthodox believers.

Suggested Citation

  • Tulbure, Narcis & Catarama, Delia, 2009. "Institutional and Socio-Cultural Factors Explaining the Development of Mutual Funds. A Cross-Country Analysis," MPRA Paper 20341, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:20341
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    File URL: https://mpra.ub.uni-muenchen.de/20341/1/MPRA_paper_20341.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    mutual funds; the Lamfalussy process; quality of regulations; work and money; socio-cultural values; religion and finance;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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