We study the determinants of compensation in the mutual fund industry using Israeli tax records. The portfolio manager compensation is influenced by fund flows driven by past raw returns. Managers are thus paid equally for fund superior performance and for the fund’s passive benchmark returns. We interpret these results though a model that combines trust-mediated money management in the spirit of Gennanioli, Shleifer and Vishny (2015) and imperfect labor market competition. In our model, compensation and fund size are jointly determined by expected raw returns and by the level of intermediary’s trustworthiness. Additional empirical evidence confirms the distinct model predictions.

We set up a large scale field experiment to study the demand of technological startups for value-added services of early investors. We seek to understand (i) whether entrepreneurs are interested in having active investors or they prefer having more freedom when managing their businesses; (ii) what value-added services are particularly appealing to entrepreneurs; (iii) how these preferences vary across entrepreneurs.

I analyze the causal effect of reduction in commissions paid to financial advisers on behavior of consumers and providers of financial products in the mutual fund industry. I exploit a policy experiment in Israel and a difference-in-differences design that compares changes in outcomes for mutual funds that were subject to exogenous differential reductions in commissions.

This paper examines the role investments by angel groups across a heterogeneous set of 21 countries with varying entrepreneurship eco-systems. Exploiting quasi-random assignment of deals around the groups’ funding thresholds, we find a positive impact of funding on firm growth, performance, survival and follow-on fundraising, which is independent of the level of venture activity and entrepreneur-friendliness in the country. However, the maturity of startups that apply for funding (and are ultimately funded) inversely correlates with the entrepreneurship-friendliness of the country. This may reflect self-censoring by early-stage firms that do not expect to receive funding in these environments.