We apply methods designed to measure mutual fund skill to a cross section of funds that is unlikely to exhibit managerial portfolio selection skill: index funds. Surprisingly, these tests imply index fund skill exists, is persistent, and is in similar proportion as in active funds. We use the distribution of passive fund performance to gauge the incremental ability of active managers. Outperformance by top active funds is lower when benchmarked to the index fund distribution and disappears when we account for residual risk. Stochastic dominance tests suggest no risk-averse investor should choose a random active fund over a random index fund.

This paper reports on a project conducted with representatives of indigenous Māori organizations that are active in New Zealand land-based sectors. The primary aim of the research was to assist these organizations in thinking about their current and future positioning with regard to climate change. Using Peter Checkland’s Soft Systems Methodology as a broad framework for the research, the paper first seeks to capture some of the likely issues that enable and constrain strategic activity in the climate change arena. It then uses various soft systems modelling tools to research and structure a debate to consider the desirability and feasibility of particular interventions.

We examine pitfalls in the use of return-based measures of systemic risk contributions (SRCs). For both linear and nonlinear return frameworks, assuming normal and heavy-tailed distributions, we identify nonexotic cases in which a change in a bank’s systematic risk, idiosyncratic risk, size, or contagiousness increases the risk of the system but lowers the measured SRC of the bank. Assessments based on estimated SRCs could thus produce false interpretations and incentives. We also identify potentially adverse side effects: A change in a bank’s risk structure can make the measured SRC of its competitors increase more strongly than its own.

Customary land is commonly perceived as a barrier to economic development and indigenous entrepreneurship in Pacific Island countries. We turn this proposition on its head, arguing that customary land provides a solid foundation for indigenous entrepreneurs who wish to achieve social, cultural and environmental, as well as economic, goals for their businesses. Furthermore, we assert that appropriate tools are needed to measure the success of indigenous businesses on customary land, as conventional tools have a narrow focus on economics that fails to capture the more holistic, sustainable development goals that indigenous people hope to achieve through their businesses. The indicators we utilise relate to socio-cultural, economic and environmental sustainability. The tool’s usefulness was scrutinized through pre-testing on two indigenous businesses in Fiji; this revealed that culturally oriented tools are essential if the sustainability of indigenous business is to be measured in terms that are meaningful to Pacific communities.

This paper explores the influence of institutions on indigenous entrepreneurship within the muttonbird economy of Ngāi Tahu (a New Zealand Māori tribe). It determines that colonisation removed the traditional Ngāi Tahu institution of executive authority which once regulated muttonbird exchange. Without this regulatory function whānau (family) birders compete against each other at their own expense and to the benefit of traders. As a consequence the birders are constrained in applying their birding knowledge and abilities to realise market opportunity. Furthermore, declining returns and harvesting pressure is in some cases reducing the financial and natural capital of whānau, whilst threats to continuing birding culture potentially undermines the socio-human capital contained within inherited traditions and the maintaining of kinship connections. It is argued that the development of a contemporary executive authority to regulate exchange and market product may reinvigorate entrepreneurial birding activities.

We study changes in market quality associated with 9 modifications to the New York State securities transaction tax (STT) between 1932 and 1981 and 3 changes to the federal STT between 1932 and 1966. We find that when there is an increase in the level of an STT, individual stock volatility increases, bid–ask spreads widen, price impacts are greater, and volume decreases. We examine the propensity of traders to switch trading locations to avoid the tax and find mixed evidence that they will change locations. Overall, our findings support the notion that the imposition of or increases in an STT harm market quality.

Art centres fulfil many functions in remote regions as a source of Indigenous identity and creativity; as a link to the global art market; as centres for community engagement and participation; and as a source of social capital providing a range of services for local communities. They are dependent on funding from State and Federal authorities and they are identified as one of the success stories in remote community development. However, they face an uncertain future in the light of their multiple functions and their position as both a source of traditional identity and a link to an external art market. The article highlights the challenges faced by government in the evaluation of their effectiveness and contribution; and in particular discusses the suitability of the hybrid economy model as a representation of their functions.

Treasury Inflation-Protected Securities (TIPS) are frequently thought of as risk-free real bonds. Using no-arbitrage term structure models, we show that TIPS yields exceeded risk-free real yields by as much as 100 basis points when TIPS were first issued and up to 300 basis points during the 2007–2008 financial crisis. This spread predominantly reflects the poorer liquidity of TIPS relative to nominal Treasury securities. Other factors, including the indexation lag and the embedded deflation protection in TIPS, play a much smaller role. Ignoring this spread also significantly distorts the informational content of TIPS break-even inflation, a widely used proxy for expected inflation.

With the widespread shift from models of welfare to business-led development, capacity development offers a useful lens from which to consider the emergence of Indigenous social enterprise as a business-led development approach. We explore capacity development from the international development literature and identify capacity development principles in the context of an Indigenous social enterprise in remote northeast Arnhem Land. Here, Aboriginal Australians continue to experience poverty and marginalisation. This paper provides an ethnographic example of the relationship between Indigenous social enterprise and capacity development. Identifying principles of capacity development in this rich context reveals the remit of the Indigenous social enterprise privileges environmental stewardship and cultural maintenance.

This paper explores the emancipatory impulse of Indigenous social innovation and social enterprise. Indigenous approaches to solving social disparities reflect a perpetual search for innovative ways to change the circumstances of Māori. Power is an understudied dimension of social innovation and social enterprise. This paper explores the power dynamics that structure the disadvantage and marginalisation that cause populations to be underserved by markets and that limit their access to resources. We highlight that it is not power per se that enables social change: rather, it is power shifts. Through a single, richly contextualised case study of a well-known Māori social innovator, Dr Lance O’Sullivan, we reveal and illustrate the nuances of Indigenous entrepreneurship in the Far North of Aotearoa New Zealand. The case epitomises the transformative impact a social entrepreneur can have on the provision of healthcare amid market and policy failures.

We examine a specific channel through which director connectedness may improve monitoring: financial reporting quality. We find that the connectedness of independent, non-co-opted audit committee members has a positive effect on financial reporting quality and accounting conservatism. The effect is not significant for non-audit committee or co-opted audit committee members. Our results are robust to tests designed to mitigate self-selection. Consistent with connected directors being valuable, the market reacts more negatively to the deaths of highly connected directors than to the deaths of less connected directors. Better connected directors also have better career prospects, suggesting they have greater incentives to monitor.

We conduct a comprehensive out-of-sample assessment of the economic value adding of commodities in multiasset investment strategies that exploit the predictability of asset return moments. We find that predictability makes the inclusion of commodities profitable even when short selling and high leverage are not permitted. For instance, a mean-variance (non-mean-variance) investor with moderate risk aversion and leverage, rebalancing quarterly, would be willing to pay up to 108 (155) basis points per year after transaction cost for adding commodities to her stock, bond, and cash portfolio. Previous research had reached mixed or even opposite conclusions, especially in an out-of-sample context.

The affiliation for Evgeniya Balabanova and Alexey Rebrov in the article by Balabanova et al. in Management and Organization Review was incomplete in the version published online. The correct affiliation is National Research University Higher School of Economics, Russia, as it appears above.