Placing the Production of Investment Returns: An Economic Geography of Asset Management in Public Pension Plans
研究了公共养老金计划为何将资产管理外包，发现外包与投资回报目标、非国内及私人市场投资配置、当地金融业活力及靠近金融中心有关，并基于访谈揭示了距离、政治和治理的影响。
Public pension funds are engulfed in a severe funding crisis. At stake is the financial stability of state and local governments as well as the welfare of over thirty million public-sector employees. Although cutting back on external asset management expenses could help save billions in taxpayers’ money and improve public pension funding, recent research suggests that public pensions remain predominantly outsourced and keep paying high fees to private-sector asset managers. This article examines why public pension funds outsource their asset management functions. It relies on mixed methods, juxtaposing positivist and reflexive approaches. The study relies on an econometric analysis of a unique panel data set of twenty-one state pension plans. The model tests specific relationships between levels of outsourcing and the organizational, economic, and political context in which these plans are embedded. The results indicate that outsourcing is linked to plans’ (1) investment return targets, (2) allocation to nondomestic and private market investments, (3) local financial sector vibrancy, and (4) proximity to a leading financial center. These quantitative results are enriched with insights from thirty-seven semistructured interviews with investment professionals employed by a top-performing state pension plan. The interviews help shed further light on how distance, politics, and governance affect pension plans’ outsourcing strategies. This article contributes new insights on context to economic geographic literature on pension decision-making as well as new perspectives to financial geography literature on the role of place and distance in institutional asset management.