Does Governance Structure Explain the Reason of CEF Traded at Discount?

摘要

There is a very typical principal-agent relationship between fund investors and fund companies. Due to the existence of agency cost, close-end funds (CEFs) trade at discount in markets. In this paper, we take CEF discount rate as the surrogate variable of agency cost. According to the empirical study on impacts of governance structure on CEF discount rate, we find out some conclusions as follows: the numbers of directors, the number of supervisors and average asset managed by directors have conic relation with discount rate. The position that a general manager holds in directorate has positive linear relation with discount rate. The numbers of substantial shareholders, index Z, the proportion of shares possessed by institutional investors within the top ten fund holders and proportion of shares possessed by the fund company itself and its shareholders have negative linear relation with discount rate. The proportion of independent director is not marked in the unit regression analysis. The proportion of shares possessed by QFII has not come into the multiple regression model.