Risk shifting versus risk management
Subtitle: investment policy in corporate pension plans
By: Joshua Rauh
Contributors: National Bureau of Economic Research
Series: NBER working paper series -- working paper 13240; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13240.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] :
Description: "The asset allocation of defined benefit pension plans is a setting where both risk shifting and risk management incentives are likely be present.  Empirically, firms with poorly funded pension plans and weak credit ratings allocate a greater share of pension fund assets to safer securities such as government debt and cash, whereas firms with well-funded pension plans and strong credit ratings invest more heavily in equity.  These relations hold both in the cross-section and within firms and plans over time.  The incentive to limit costly financial distress plays a considerably larger role than risk shifting in explaining variation in pension fund investment policy among U.S.  firms"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 8/13/2007.

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