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Systems Thinking Perspective on the Sustainable Growth Strategy of Hedge Funds Market  

Kim, Tae-Hyun (Seoul School of Integrated Science & Technologies (aSSIST))
Chung, Sam-Young (Graduate School of Finance, aSSIST)
Eom, Jae-Gun (aSSIST)
Publication Information
Korean System Dynamics Review / v.17, no.3, 2016 , pp. 91-120 More about this Journal
Abstract
This study explores hedge fund characteristics that affect hedge fund performance, namely, fund size, fund age, and performance fee. Previous studies have examined relationships between hedge fund characteristics and fund performance using singular and static thinking to report inconsistent findings without providing full understanding of the causal relationships among variables. To identify that comprehensive causal relationships between hedge fund characteristics and hedge fund performance, this research applies the system dynamics perspective, which allowed demonstration of the interactions within the overall system beyond the singular causal relationships between hedge fund characteristics and performance found in existing traditional research. This study contributes to existing literature in the following ways. First, it overcomes the limitations of singular research methodologies by looking at the integrated system of hedge fund characteristics and fund performance from a bird's eye view based on their dynamic feedback relationships. Second, policy suggestions in terms of regulation and education are presented as growth strategies for the sustainable development of the Korean hedge fund market.
Keywords
Fund Size; Fund Age; Performance Fee; Hedge Funds Characteristics; Fund Performance; Causal Loop Diagram; Systems Thinking;
Citations & Related Records
Times Cited By KSCI : 5  (Citation Analysis)
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