The effect of private pension funds’ bidding on fees and competition
DOI:
https://doi.org/10.15359/eys.21-50.3Keywords:
DEA, private pension funds, bidding, transfersAbstract
This paper sheds light on the effect of bidding recent private pension funds on fees and competition. In order to accomplish the latter result, we used panel data of ten Latin American countries organized in quarters from 2005-2015. The reform of the private pension system in some countries in the region allows for the implementation of a mechanism of auctions on fees to capture new members. The objective of this mechanism was to drop fees and promote competition. We concluded that the effect on fees is successful since fees dropped while the effect on competition is ambiguous according to our panel data model and the measurement of efficiency. Results are relevant to regulate policies in the market of precautionary savings.
References
Aggarwal, R., Inclan, C. and Leal, R. (1999). Volatility in emerging stock markets. Journal of Financial and Quantitative Analysis, 34(1), 33-55. Retrieved from https://www.jstor.org/stable/2676245?seq=1#page_scan_tab_contents
Arestis, P., & Caner, A. (2004). Financial liberalization and poverty: Channels of influence. (Working Paper Nº 411). Retrieved from the web site Levy Insitute: http://www.levyinstitute.org/pubs/wp411.pdf
Asociación Internacional de Organismos de Supervisión de Fondos de Pensiones (2015). Various publications. available at http://www.aiosfp.org/
Barr, R., Killgo, K. and Siems, T., & Zimmel, S. (1999). Evaluating the productive efficiency and performance of U.S. commercial banks. (Working Paper). Retrieved from Federal Reserve Bank of Dallas: https://core.ac.uk/download/pdf/6592998.pdf
Barrientos, A., & Boussofiane, A. (2001). The efficiency of pension fund managers in Latin America. (Working Paper 11/2001). Retrieved from the web site University of Manchester: http://ageconsearch.umn.edu/handle/30696
Berger, A. (1995). The Profit-Structure Relationship in Banking--Tests of Market-Power and Efficient-Structure Hypotheses. Journal of Money, Credit and Banking, 27(2), 404-431. Retrieved from http://www.jstor.org/stable/2077876?seq=1#page_scan_tab_contents
Berger, A., & De Young, R. (1997). Problem loans and cost efficiency in commercial banks. Journal of Banking and Finance, 21(6), 849-870. Retrieved from https://www.federalreserve.gov/pubs/feds/1997/199708/199708pap.pdf
Berger, A. and Mester, L. J. (1999). Explaining the dramatic changes in performance of US banks: Technological change, deregulation and dynamic changes in competition (Working paper NO.01-6). Retrieved from http://fic.wharton.upenn.edu/fic/papers/01/0122.pdf
Bernal, N., Muñoz. A., Perea H., Tejada, J., & Tuesta D. (2008). Una mirada al sistema peruano de pensiones: diagnóstico y propuestas. Estudios previsionales del BBVA. Retrieved from https://www.bbvaresearch.com/KETD/fbin/mult/Unamiradaalsistemaperuanodepensiones_tcm346-189603.pdf
Bernstein, S., Larraín G., & Pino, F. (2006). Chilean pension reform: Coverage facts and policy alternatives. Economia 6(2), 227-279. Retrieved from https://www.jstor.org/stable/20065500?seq=1#page_scan_tab_contents
Bernstein, S., y Carolina, C. (2007). Los determinantes de la elección de AFP en Chile: nueva evidencia a partir de datos individuales. Estudios de Economía (34)1, 53-72. Recuperado de http://www.econ.uchile.cl/uploads/publicacion/e6e6700d-962d-4640-a612-2c10a9bfda9e.pdf
Calvo, E., Bertranou, F., & Betranou, E. (2010). Are old-age pension system reforms moving away from individual retirement accounts in Latin America? Journal of Social Policy, (39)2, 223-234. Retrieved from https://www.cambridge.org/core/journals/journal-of-social-policy/article/are-old-age-pension-system-reforms-moving-away-from-individual-retirement-accounts-in-latin-america/B698BF79AFF639A75AE81CBE68D7284C
Carmo, M. (2012). Argentina: On the slippery slope to full nationalization. The Brazilian Economy, 4(2), 33-37. Retrieved from http://bibliotecadigital.fgv.br/ojs/index.php/be/article/view/21913
Charnes, A., Cooper, W. W., & Rhodes, E. (1978). Measuring the efficiency of decision making units. European Journal of Operations Research, 2(6), 429-44. Retrieved from http://www.sciencedirect.com/science/article/pii/0377221778901388
Charnes, A., Cooper, W. W., Sun, D. B. & Huang, Z. M. (1990). Polyhedral cone-ratio DEA models with an illustrative application to large commercial banks. Journal of Econometrics. (46), 2, 73-91. Retrieved from http://www.sciencedirect.com/science/article/pii/030440769090048X
Chavez Bedoya (2016). The effects of risk aversion and density of contribution on comparisons of administrative charges in individual account pension systems. Journal of Pension Economics & Finance, 15(2), 1–20. Retrieved from https://www.cambridge.org/core/journals/journal-of-pension-economics-and-finance/article/the-effects-of-risk-aversion-and-density-of-contribution-on-comparisons-of-administrative-charges-in-individual-account-pension-systems/F0A2A92A61C46EE499685B8B777F1279
Cooper, W. W., Seiford, L. M., & Zhu, J. (2004). Data envelopment analysis: History, models and interpretations, in Cooper, W. W., Seiford, L. M. and Zhu, J. (Eds.), Handbook on Data Envelopment Analysis (pp. 1-39). Retrieved from http://link.springer.com/chapter/10.1007%2F1-4020-7798-X_1#page-1
Das, M., & Mohapatra, S. (2003). Income inequality: The aftermath of stock market liberalization in emerging markets. Journal of Empirical Finance, (10)1-2, 217-248. Retrieved from http://www.sciencedirect.com/science/article/pii/S0927539802000257
De Young, R., Hassan I., Kirchhoff B. (1998). The impact of out-of-state entry on the cost efficiency of local commercial banks”. Journal of Economics and Business, 50(1), 191-203. Retrieved from http://www.sciencedirect.com/science/article/pii/S0148619597000775
Farrel, M. J. (1957). The measurement of productive efficiency. Journal of the Royal Statistical Society, 120(3), 253-290. Retrieved from https://www.jstor.org/stable/2343100
Forster and Shaffer (2005). Bank efficiency ratios in Latin America. Applied Economics Letters, (12), 529–532. Retrieved from http://www.tandfonline.com/pricing/journal/RAEL20
Hall, R. E. (1989). Invariance properties of Solow's productivity residual (Working Paper No. 3034). In P. Diamond (ed.), Growth, Productivity, Unemployment. Retrieved from http://www.nber.org/papers/w3034.pdf
Hamilton, J. and Lin, G. (2001). Stock market volatility and the business cycle. Journal of Applied Econometrics, 11(5), 573-693. Retrieved from http://www.jstor.org/stable/pdf/2285217.pdf
Kay, S., & Sinha, T. (2007). Lessons from Pension Reforms in the Americas. Retrieved from http://www.pensionresearchcouncil.org/publications/pdf/0-19-923077-6.pdf
Loayza, N. (2008). Causas y consecuencias de la informalidad en el Perú. Revista de Estudios Económicos, 15, 43-64. Retrieved from http://www.bcrp.gob.pe/docs/Publicaciones/Revista-Estudios-Economicos/15/Estudios-Economicos-15-3.pdf
Lusardi, A., and Mitchell, O. (2007). Babyboomer retirement security: The roles of planning, financial literacy, and housing wealth, 54(1) 205-224. Retrieved from http://www.sciencedirect.com/science/article/pii/S0304393206002467
Mesa-Lago, C. (2008). Reassembling social security: A survey of pension and health care reforms in Latin America. Retrieved from https://global.oup.com/academic/product/reassembling-social-security-9780199233779?cc=pe&lang=en&
Mesa-Lago, C. (2014). Reversing pension privatization: The experience of Argentina, Bolivia, Chile and Hungary (Working Paper Nº 44). Retrieved from web site extension of social security: http://www.social-protection.org/gimi/gess/RessourcePDF.action?ressource.ressourceId=43277
Müller, K. (2003). Privatizing old-age security: Latin American and Eastern Europe compared. Retrieved from https://searchworks.stanford.edu/view/5507359
Neiss, K. (2001). The markup and inflation: Evidence in OECD countries. The Canadian Journal of Economics, 34(2), 570-587. Retrieved from https://www.jstor.org/stable/3131869?seq=1#page_scan_tab_contents
Pestana, C., Ferro, G. and Romero, C. (2008). Technical efficiency and heterogeneity of Argentina pension funds (Working Paper Nº 29). Retrieved from the web site https://aquila1.iseg.utl.pt/aquila/getFile.do?method=getFile&fileId=26530
Piñeira, J. (1991). El cascabel al gato: la batalla por la reforma previsional. Retrieved from http://www.josepinera.org/zrespaldo/el_cascabel_al_gato.pdf
Piñeira, J. (1995). Empowering workers: The privatization of social security in Chile. CATO, 15(2), 1-18. Retrieved from https://object.cato.org/sites/cato.org/files/pubs/pdf/cl-10.pdf
Rinstad, V. (1974). Some empirical evidence on the decreasing scale elasticity. Econometrica, (42), 1, 87-102. Retrieved from https://www.econometricsociety.org/publications/econometrica/1974/01/01/some-empirical-evidence-decreasing-scale-elasticity
Rofman, R., y Lucchetti, L. (2006). Sistema de pensiones en América Latina (Discussion Paper 0616). Retrieved from de web site World Bank: http://siteresources.worldbank.org/SOCIALPROTECTION/Resources/SP-Discussion-papers/Pensions-DP/0616Spanish.pdf
World Bank (1994). Averting the old-age crisis. Retrieved from http://documents.worldbank.org/curated/en/973571468174557899/pdf/multi-page.pdf
Published
How to Cite
Issue
Section
License
This publication is subject to the Creative Commons License; therefore, its attributions and restrictions must be respected.
Authors publishing in this Journal accept the following conditions:
- Authors retain copyright ownership and give the Journal first publication right of the paper, which is registered with the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. This license allows third parties to use the published work provided it is sourced as firstly published in this Journal.
- Authors may enter into other independent and additional contractual agreements for the non-exclusive distribution of the article published in this Journal (e.g., to be included in an institutional repository or published in a book) provided it is clearly stated that the work was published in this Journal for the first time.
- Authors are allowed and recommended to publish their work on the Internet (for example, on institutional or personal pages) before and during the review and publication process, as it can lead to productive exchanges and a greater and faster dissemination of work published.
The Economía & Sociedad Journal, published by Universidad Nacional, is licensed under a Creative Commons Reconocimiento-NoComercial-CompartirIgual 4.0 Internacional License. Based on http://www.revistas.una.ac.cr/index.php/economia.
