The Ruins by Scott Smith Essay Example for Free

The Ruins by Scott Smith Essay The Ruins by Scott Smith is a remarkably thrilling horror novel published in 2006, which has been transformed into a major motion picture in 2008 with a similar title. Scott Smith is an American writer who was educated at Dartmouth College and Columbia University. His style of writing almost has this immense power that can invisibly hold anybody in suspense. Racing through pages , readers will not be able to put the book down until they find out what happens next, even after spending eight or nine hours of reading time. With its disturbing sense of horror and the feeling of reality combined with a mystery that can hardly be solved, The Ruins will definitely appeal to young people especially teenagers, whose curiosity can often lead them to plenty of endless yet dangerous adventures. This is a spine-chilling story about a group of five young Americans on vacation, who are passing through a densely dark jungle, leading their ways from Coba an extremely remote area of Mexico to a Mayan village. The fun and laughter of a day trip starts to twist into an absolute nightmare, as they bump themselves into some ancient ruins in the middle of nowhere. Once they have made their steps up the ruins, crossing the border between a hill and an empty clearing, they had no choice but to keep going without turning back. Suddenly becoming captive on this hilltop with almost no food, no water, no shelters or support, the five young adults have to find another way to survive, if not making their ways back down and getting killed by the Mayans rifles and bows. With plenty of human corpses being discovered later on, whom died with their flesh and bones ripped into pieces by tons of green vines and a type of blood-red flowers, the Americans slowly realise that it is the end of their journey, where only death can put a full stop to everything. After days of trying escape, hoping and fighting against nature, one die after another, leaving no marks of their arrival, with their body being buried deep down into the Earth, covered with the long green vines, which have revealed themselves to a cold blooded killer. Being set out in the wild of Mexico, the story has the smell of a humid day with rough soil, damp trees sap and wild flowers, lingering in the air. The entire environment densely covered with trees shades and flourishing undergrowths seems to become so alive through Scott Smiths descriptive writing. With the use of vivid adjectives and lively details, depicting a vibrant but deadly outcast of a Mexican jungle, the author has succeeded in creating a three dimensional setting, where readers senses can be fully awakened. Personally, I was completely amazed by how realistic the setting seemed when reading the novel. I could easily imagine the eerie atmosphere surrounding the characters when passing through ceilings of canopies and the exhaustion of a hot and dusty summer day. I could feel the grip of fright and terror in their escapes from the deadly vines with their burning acidic sap, or the pain drilling through their skins as the vines pull away their strips of flesh. The way Scott Smith has maintained the suspense and tension through out the whole novel is magnificent with the use of short sentences, together with applying flows of characters personal thinking. Besides, he has gone into describing in detail how the fear of each character travelled through different stages. This effect has successfully driven the readers to race through lines and to flap over pages as fast as possible. There have been times when I felt like holding my breath, pushing myself to finish another page, which just kept going. Moreover, the method of eliminating the use of chapters or parts, keeping the story moving is indeed, very clever. Scott Smith has managed to fascinate readers, particularly, myself, making them to keep reading on and on and gradually get swept into an endless journey full of horror and panic. Finally, as strange as it might sound, it is the frustration caused by the immaturity and impatience of the characters, which indeed, keeps me interested until the very end of the novel. By including different personal thoughts of different characters along the story lines, the author has portrayed very realistically how stupidly people at the very early stage of their lives, without much experience and self-control, would react under such circumstances. For example, how the two female characters kept panicking and blaming themselves as well as others for their current situation or how the group leader, so impatiently and blindly, led everyone into a path that had been covered and hidden on purpose at the beginning. In the end, it is a very valuable lesson about patience, care and teamwork which has been embraced by Scott Smith. With the great fear that will long haunt its readers, The Ruins should be considered to be not only one of the first top ten books but also one of the best horror novels of the century, which has made its way through many other great publications to be one of the National Bestsellers of the United States.

Determinants of Mutual Fund Growth in Pakistan

Determinants of Mutual Fund Growth in Pakistan This study is actually about the mutual fund growth and the determinants which are influencing on the growth of these funds. We ask whether the growth of funds is influences by the management fee, family proportion and the expense ratio or not. How much these variables influenced the growth of funds. We further check out the relation of the family assets and the return on the funds with the performance of the funds. Investors are paying the charges to control the funds and for the growth of the funds in the shape of management fee and the administrative charges. We study the behavior and the output of the funds from the duration of 2005-2009. We selected the funds which are listed in KSE. The funds are selected which are in the family proportions because of the nature of regression model which is used for the calculation of the effect of determinants on the growth of the funds. We use two models for the interpretation of the data. These are fixed effect model and cross section model. Through these models we elaborate the effects of different factors on the growth of these funds. We focus on the management fee for checking the efficiency of the funds management. Whether these are contributing in the growth of the funds or not, if not then these fee is only for the benefit of funds management INTRODUCTION In Pakistan the mutual fund industry handles a significant portion of the assets of individual investors. Basically there are many factors which can affects on the growth of the mutual fund. In these determinants of the mutual funds which can affect the growth of the mutual fund we are focusing on the management fee, the main focus is on the charging of the management fee and its impact on the growth. Whether it is beneficial for the growth or not? Along with this we are determining some other major determinants of which can influence on the growth of these funds in Pakistan. Compensation to managers is primarily in the form of a Management fee. With few exceptions, Management fees are charged as a percentage of the assets under management rather than on the basis of performance. It is therefore in the interest of management to grow the total assets in the fund and in the associated fund family. One tool that managers may use to grow funds is the Management fee. The fees, which are l imited to1% to 3% per year as Management fee, are used to cover administrative costs. This paper studies whether or not the charging of a Management fee support the investors by growing the worth of mutual funds family along with that of some other determinants. Next we checked that the charging of Management fee leads to greater cash inflow for the funds which charge them. We focus on various mutual funds existing in the Karachi Stock Exchange and listed there, in order to control for the variety of commission payment schemes associated with management fee charging funds that are now available to shareholders and are in the group of families charging Management fee. LITERATURE REVIEW These are some of the review from the experts and the researchers. Academic opinion on mutual fund fees is generally critical. Bogle, points out that the average cost of owning mutual funds has risen over 100 percent in the last sixty years. Freeman and Brown contend mutual fund advisory fees alone are excessively high. In their view the mutual fund industry is dominated by conflicts of interest where the mutual fund boards fail to negotiate arms-length management contracts with asset managers. In their view asset managers are over compensated for the services that they provide. Similarly Ang, Chen and Lin argue that the primary benefit that managers can provide to the shareholders is the reduction of expenses. The reason is that management has more control over expenses than over any other aspect of the return to the shareholders. Therefore, if managers are not working to reduce expenses they are failing to carry out their primary duty to the shareholders. Golec found that fund managers are compensated primarily on the basis of a percentage of the assets under management. That compensation scheme provides fund managers with a strong incentive to grow fund assets regardless of the degree to which such growth is consistent with shareholder welfare. Collins, along with Livingston and ONeal (1998) and ONeal (1999) argue that some investors pay to receive professional investment advice and assistance in the purchase of mutual funds. Essentially they argue that brokers provide some combination of resolving asymmetric information for investors and providing a needed service in completing and maintaining the required records in order to complete the investing process. We closely examine the issue of whether brokers primarily resolve asymmetric information or primarily provide investors with record completion and maintenance services. One way to grow the assets is to well manage the fund by the fund management of that varies funds. Management f ees provide a source of funds for controlling and managing the funds. Naim Sipra (2008) one of the interesting things to note is the low correlation between the funds and the market portfolio. In US studies the correlation between the market and mutual funds is often 0.9 or above. A high correlation with the market is an indication of a high degree of diversification. The low correlation in the Pakistani case suggests that the mutual funds are not doing a very good job of diversification. The low correlation and also the low betas are probably due to inclusion of fixed income securities such as the Term Finance Certificates (TFCs) in the portfolios of these funds. Since the composition of the funds is not publicly known therefore it is not possible to analyze this issue any further. Ali S M, Malik A S (2006) A Capital markets play a vital role in the economic development of a country. It is now widely accepted that there is a direct correlation between economic growth and the development of the financial sector. Mutual funds are considered to be an imp ortant source of injecting liquidity into the capital markets. A well established financial intermediation system facilitates the economic activity by mobilizing domestic as well as foreign savings. Muhammad Akbar Saeed (2004) during the last two years, mutual fund sector has more than tripled in size to Rs. 112 billion (as of 31-Dec-04). The industry players are predicting that the business is likely to grow by 200 percent over the next five years. The success of the industry will lie in several factors, one of which will be the role of regulators and their efforts to continuously evolve the code of corporate governance for the mutual fund industry. Moeen Cheema and Sikandar A. shah (2006) Mutual funds are becoming vehicles of securities investments most favored by the general public worldwide. Whereas, this trend is more pronounced in the developed securities markets of the United States of America and Europe, mutual funds are increasingly gaining the public attention in the developing economies as well. Pakistan is not an exception to this global trend and even though mutual funds form a comparatively small segment of the securities markets, they have grown phenomenally over the last few years. According to the Mutual Fund Association of Pakistan (MUFAP), whereas mutual funds may not shield investors from the risks associated with overall market failure, the ability to diversify that they provide may reassure public investors as regards the failure of individual companies and hence make them less wary of insider opportunism in any given corporation. We similarly consult some of the related articles for this purpose, which can be seen from the references. We also consult some of the conflicting matters with the course instructor. In summary, Management fee is basically for the controlling of the mutual funds and for the growing purpose of the funds. But is it working well for the growth of the mutual funds which funds are being charging this fee. HYPOTHESES AND METHODOLOGY This paper studies whether the shareholders income and their wealth increase from the growth of the mutual funds through the charging of Management fees. The main focus on the Management Fee but there are some other determinants like family proportion, expense ratio, return through sharp ratio and assets turnover in that specific duration which we selected for the research purpose. There are a number of ways in which investors could enjoy by the growing of wealth from funds which charge this fee. Since the fee is used for administrative expenses. It could aid investors by making them aware of high quality managed funds that might otherwise be invisible to them. There are several possible examples of funds where this might apply. First, funds charging this management fee lead the higher total returns. Funds with greater total returns would benefit investors in that, if the superior performance was persistent, investors would have a higher terminal wealth from investing in these funds than they would have from investing in other funds. A fee showing the existence superior total returns would be of great of interest to investors. The null hypothesis: Ho: There is no difference between the total returns of mutual funds that charge the Management fee and those that do not charge the Management fee will be tested. Second, the Management fee might be a signal to investors of a greater risk adjusted rate of return. A greater risk adjusted return would imply that investors could earn superior returns with less chance of loss with respect to other portfolios offering the same level of return. The second null hypothesis to be tested is: Ho: There is no difference in risk adjusted returns between the risk adjusted return of mutual funds that charge the Management fee and those that do not charge the Management fee. 2nd hypothesis will be tested using Sharpe Ratio. It needs to be noted that these null hypotheses could be rejected either because the funds charging the Management fee over perform or because they under perform. If there is persistent over performance, the over performance is in the interest of the investors. However, persistent under performance would mean that the fee being paid by the investors is being used to let them know that these mutual funds are not performing well that will leave the investors with less terminal wealth. Such a result would be consistent with the view that Management fees are inconsistent with shareholders income growth. Third, the funds charging the Management fee could be the funds that have lower expense ratios. The numerator of the expense ratio includes all of the operating costs of managing the fund; including the management fee and other administrative costs as well as all the expenses. It may be that after the Management fee is removed from the expense ratio the fund has lower expenses than other funds. Such a result would support the idea that the fee itself is merely a substitute for other costs and that the investor in such a fund is no worse off, and could be better off than the investor in a fund that does not have the fee. The null hypothesis to be tested is: Ho: There is no difference of the expense ratios of the funds on the growth of the mutual funds. 3rd hypothesis will be tested after subtracting the Management fee from the expense ratio. The null hypothesis could be rejected because the funds charging the fee have lower expense ratios or because the funds charging the fee have greater expense ratios. In the first case the management fee would be in the interests of shareholders and in the second case the fee would not be in the interests of shareholders. If it is found that the management fee is not supporting the growth of the mutual funds of shareholders, the other alternative is that the fee is in the favor of the fund management. It would be in the interest of fund management to charge the management fee if the existence of the fee led to faster asset growth than could otherwise be expected. Management desires faster asset growth because of the manner in which management is compensated. Fourth, managers might be using management fees to grow funds more rapidly than they would otherwise be growing. The growth of the fund from time t to t+1 is defined as: Gi = (Assetst Assetst -1(1+R))/Assetst -1 (1)†¦Ã¢â‚¬ ¦Equation Where Gi is the growth rate in the assets under management by fund i from time t-1 to time t. Assetst are the net assets under management at time t. Since the assets under management may grow either due to new sales or returns, equation 1 eliminates the growth that is due to returns. For all of the funds in the study, the management fee is based on the net assets under management which may provide a managerial incentive to grow the fund as rapidly as possible. Ho: The growth rate of mutual funds that charge management fee is higher as compare to the funds which are not charging the fee. We will test whether the funds that charge the fees actually are growing faster using a regression model that controls for risk adjusted return, asset turnover rate, the relative size of the mutual fund within a family of funds, the expense ratio of the fund other than the management fee and the level of the management fee. Gi = ÃŽ ² 0 + ÃŽ ² 1RARi + ÃŽ ² 2ATi + ÃŽ ² 3ASSETi + ÃŽ ² 4FAMPROi + ÃŽ ² 5ERi + ÃŽ ² 6FEEi + ÃŽ ² i †¦2) Equation Gi is the growth due to new investment in funds i from previous year t to current year t+1. Growth is defined by equation 1. This sign (?) Measures the sensitivity of the growth rate of the mutual fund to the specified factor in each case. An expected positive sign means that the growth rate is expected to respond positively to increases in the variable. An expected negative sign means that the growth rate is expected to respond negatively to increases in the variable. The expected sign is specified for each of the control variables. RARi is the risk adjusted returns on fund i from year t to t+1, estimated by using the Sharpe Ratio. In accordance with past findings, this control variable is hypothesized to have a positive sign and does take a positive sign. ATi is the asset turnover for fund i which is measured through the formula of Net Income divided by the Total Assets. Turnover is a measure of investing activity. The greater the turnover, the greater the cost of operating the fund. Holding all else equal, the greater the cost of operating the fund the lower the growth in the fund. This variable is hypothesized to have a negative sign and does have a negative sign. ASSETi is the total assets of fund i at time t. The larger a fund, generally, the older the fund is so that assets serve as a proxy for the age of the fund. The older a fund, the more well known the fund is to the investing public and the easier it will be to sell the fund. Assets are expected to and do have a positive relation with growth. FAMPROi is the proportion of the mutual fund family assets made up by fund i. The larger the proportion of the family assets in the fund the slower will be the growth, as management efforts will be directed primarily at the newer, smaller funds. This variable is expected to have a negative sign and generally has a negative sign. ERi is the expense ratio of fund i , less the management fee from all the expenses. The expense ratio includes all of the costs that the management company charges to the fund including the management fee, trading costs, and any other expenses. Since the purpose of the test is to isolate the effect of the management fee, that fee is subtracted from the expense ratio. The greater the expense ratio, the lower the growth. Investors should prefer a lower cost fund to a higher cost fund. The variable generally has the expected negative sign. FEEi is the level of the Management fee. For the vast majority of the funds in the study, this variable will be charged by 1% to 3%. It is expected that the null hypothesis will be rejected and that this variable will have a positive sign which is generally the case. The regression model (Equation 2) is estimated on an annual basis for the years 2004 through 2009 for all funds that have all required data available. Equity and fixed income funds are examined separately. A positive and significant sign on the FEE variable will lead to a rejection of the null hypothesis and will be consistent with the idea that the Management fee is used by management to increase growth in assets. There are two economic rationales that apply to the imposition of the Management fee on mutual fund investors. The first is that investors are the primary beneficiaries. The second is that fund management is the primary beneficiary of the fee. The major contribution of this paper is to determine whether the facts are more consistent with the investors or the managers being the beneficiaries for mutual funds. THE DATA All of the data are taken for the years 2004 through 2009. Since 2004 is the first year and lagged data is needed, the results are presented for all funds for which all data was available for 2005 through 2009. The data are summarized in the table form and data is regarding the equity funds. As far as the collection of the data is concerned so we consult many sources for the collection of the data. Mainly we collect it from KSE. From where the full data was not available and after that we consult the Business recorder, Statistical Bulletin of Pakistan [Federal Bureau of Statistics (2005)] for 2005-2009 and SBP for the collection of the financial reports and the kibor rates. The net asset values are collected from the KSE as well as from Brecorder. The data available in the form of tables and excel sheet which is attach along with this article. Mainly we collect the data of the equity mutual funds. Our focus was on most commonly known mutual funds of the Pakistan market. We selected a lmost 21 mutual funds from the KSE available sources but because of the running of Regression Model, for which we need only the family funds which are in the form of groups. We neglect the individual funds because of the family proportion concern. So now the data available is of 13 mutual funds which are in the form of family. From that we could generate the family proportion of the mutual funds assets. Because the amount of the data was less for five years so we take the data in the panel form representing through panel EGLS. RESULTS These are some of the results which we conclude from the help of the CROSS SECTION MODEL FIXED EFFECT MODEL. In econometrics and statistics, a fixed effects model is a statistical model that represents the observed quantities in terms of explanatory variables that are all treated as if those quantities were non-random. This is in contrast to random effects models and mixed models in which either all or some of the explanatory variables are treated as if they arise from the random causes. Often the same structure of model, which is usually a linear regression model, can be treated as any of the three types depending on the analysts viewpoint, although there may be a natural choice in any given situation. In panel data analysis, the term fixed effects estimator (also known as the within estimator) is used to refer to an estimator for the coefficients in the regression model. If we assume fixed effects, we impose time independent effects for each entity that are possibly correlated with the regressors. The major attraction of fixed effects methods in non-experimental research is the ability to control for all stable characteristics of the individuals in the study, thereby eliminating potentially large sources of bias. Within-subject comparisons have also been popular in certain kinds of designed experiments known as changeover or crossover designs (Senn 1993). In these designs, subjects receive different treatments at different times, and a response variable is measured for each treatment. Ideally, the order in which the treatments are received is randomized. The objective of the crossover design is not primarily to reduce bias, but to reduce sampling variability and hence produce more powerful tests of hypotheses. Fixed effects methods cannot estimate coefficients for variables that have no within-subject variation Time-series cross-section (TSCS) data harness both cross-temporal and cross spatial variation to maximize empirical leverage for theory evaluation. However, this powerful data structure also requires careful consideration of temporal and spatial (cross-unit) heterogeneity, temporal and spatial dynamic processes, and potentially complex stochastic error structures. In the table 1 which is descriptive table and that is showing the mean, median and standard deviation as well. As it is clear and shows from the descriptive table that the sharp ratio, which is basically the return calculation through the sharp measure, is the negative impact on the growth of the mutual fund. As you will increase the return on the funds or the return increases over the amount of the funds the impact of it is negative on the growth of the mutual fund. Similarly the coefficient of this sharp ratio is also negative impact on the growth of the mutual funds. Now secondly, the asset turnover showing, the mean in the descriptive table representing the negative value which means that if the asset turnover will be negative so it can reduce the growth of the mutual funds. Assets are in the positive form and they show that if the asset of the fund increases so it means that the impact of this on the growth of the fund is positive and it contribute in the growth of the mutual fu nd. The family proportion of the mutual fund should have the positive impact on the growth of the mutual fund and in the table 1 of the descriptive result, the result of this is positive so it means that the family proportion increasing in this which is the positively impacting on the growth. Expense ratio is resulting negatively on the growth of the funds, and the management fee which is the basic testing of this is also showing the negative impact on the growth of the mutual funds in Pakistan. TABLE NO. 1 Descriptive Analysis GR SR AT ASSET FP ER FEE MEAN 3.989 -1.096 -0.008 2633207 0.365 1.262 54455166 MEDIAN 0.005 -0.540 0.010 1435134 0.410 1.260 38342000 MAX. 63.590 2.290 0.450 14193216 1.000 10.900 2.49708 MIN. -27.660 -5.010 -1.070 0.00000 0.000 0.000 0.00000 STD. DEV 12.763 1.470 0.272 3060791 0.255 1.644 53774795 SKEW. 2.134 -0.946 -1.834 1.951847 0.187 4.008 1.599424 PROB. 0.000 0.004 0.000 0.0000 0.729 0.000 0.0000 SUM 259.290 -71.278 -0.525 1.71608 23.400 82.060 3.54709 OBS. 65 65 65 65 65 65 65 TABLE NO. 2 Correlation Matrix DETERMINANTS GR SR AT ASSETS FP ER FEE GR 1.000 -0.269 -0.578 -0.163 0.062 0.100 -0.146 SR -0.269 1.000 0.360 0.124 0.174 -0.186 0.132 AT -0.578 0.306 1.000 0.139 0.071 -0.403 0.125 ASSETS -0.163 0.123 0.193 1.000 0.503 0.084 0.972 FP 0.061 0.174 0.071 0.503 1.000 0.270 0.538 ER 0.100 -0.187 -0.403 0.084 0.270 1.000 0.058 FEE -0.146 0.133 0.125 0.972 0.538 0.058 1.000 Now further according to the table 3 which is Fixed Effect Model, we design a panel least squares method in this model for the calculation of the data, in that the sharp ratio is resulting in the negative form and show the result that as the return on the mutual funds increases the growth effected negatively. The coefficient of the sharp ratio is negative and the result is showing significance, which is acceptable. After that assets turnover of it is in negative figure which shows a negative impact on the growth and the prob. Is significance we are keeping the level of the significance here is 0.10. The coefficient of the family proportion is positive thats good for the growth of the mutual fund but it is not significance because the prob. is higher than the level of significance. The expense ratio is showing the negative result, which means that the increase of the expense ratio is a negative impact on the growth of the mutual funds. Its coefficient value is negative and the value i s significant according to the fixed effect model. Now comes the management fee, according to this model the management fee is resulting in the positive value for the fund, that means that the funds that using the Management fee are contributing in the better growth of the fund because the coefficient value is positive but according to this model the fee is not significant here, the result is that the funds charging the fee can make the funds growing as compare to the funds that are not charging the management fee. The factor we assume here that the management fee effect positively for the growth of the funds but because of the political instability and the country economic situation it is not resulting good in the growth of the mutual funds in Pakistan. Lastly according to this model, value of Lassets is positive and the significant level is good which shows the Lassets significant. We take the assets here despite of the assets because of the mismatch and not the proper results fro m the assets. So it is impacting positively on the growth of the mutual fund. If it increases the mutual fund growth will increase. TABLE NO. 3 Fixed Effect Model Dependent Variable: GR Method: Panel Least Squares Sample: 2005-2009 Total panel (unbalanced) observations: 64 Cross-sections included: 13 DETERMINANTS COEFFICIENT STD. ERROR T-STATISTICS PROB. SR -3.772 1.532 -2.462 0.018 AT -24.784 7.253 -3.417 0.001 LASSET 0.447 0.155 2.878 0.006 FP 4.932 9.653 0.512 0.612 ER -2.250 1.054 -2.135 0.038 FEE 1.637 1.427 1.144 0.258 CONSTANT -1.456 4.251 -0.343 0.734 EFFECTS SPECIFICATIONS CROSS-SECTION FIXED (DUMMY VARIABLES) PERIOD FIXED (DUMMY VARIABLES) ADJUSTIFIED R-SQUARED 0.438 MEAN.DEP BAR 4.051 S.E OF REGRESSION 9.639 S.D. DEP BAR 12.859 SUM SQUARED RESID 3810.045 SCHWARZ CRITERION 8.418 LONG LIKELIHOOD -221.580 F-STAT. 3.227 DURBIN–WATSON STAT 1.896 PROB F-STAT 0.000 In table 4 and 5, we use the CROSS SECTION MODEL (cross section random effects cross section weights), according to both of these methods the calculations are same, the coefficient values and the significant are same. The assets turnover is showing the negative value which shows according to it that the more assets turnover can impact the growth of the mutual funds and the value is significant in both methods as well as in the fixed effect model. The value of the sharp ratio means the return of the mutual fund is showing coefficient negative in the random effect method that means that the increase of the return value can effect the growth negatively and growth is less when this return value is high while the value is significant which means it is good for the growth of the mutual fund and same value is showing in the fixed effect method. But in the cross section weights method the value of the return is positive and it is not significant there. So it shows here a that the higher ret urn impact the mutual fund growth positively means higher the return higher the growth of the mutual fund nut it is nit the case here. Family proportion of the mutual funds according to the both methods says that the results are showing positive relationship in the growth of the funds and the higher the family proportion. The values are significant according to the probability measures. Expense ratio according to both of these models reflects the results that expense ratio is impacting the growth of the funds negatively. Means as the ratio of the expense increase the growth is going to be less for the mutual funds. The coefficient value of the expense ratio is in negative value and the value in both the methods shows that this is significant. As far as the Management fee is concerned here so according to the both methods the management fee is impacting on the growth inversely. The coefficient value in both the cases is negative means if the management fee is charged by the mutual fu nd management so the growth is less than if they dont charge the management fee. And the value is significant in both the methods. So it is clear from now that according to the Cross Section Model the impact of the management fee is negative on the growth of the mutual funds. The management who is charging the management fee their growth of the mutual funds is less and downward. TABLE NO. 4 Cross Section Weights Dependent Variable: GR Method: Panel EGLS (Cross Section Weights) Sample: 2005-2009 Total panel (unbalanced) observations: 54 Cross-sections included: 13 Linear Estimation after One-Step Weighting Matrix VARIABLE COEFFICIENT STD.ERROR T-STAT PROB SR 0.439 0.825 0.532 0.596 AT -32.916 3.815 -8.628 0.000 FP 4.404 3.353 2.506 0.016 ER -2.032 0.719 -2.825 0.006 FEE -5.297 1.997 -2.665 0.010 LASSET 0.447 0.155 2.877 0.006 WEIGHTED STATISTICS R-SQUARED 0.788 MEAN DEPENDENT VAR 7.211 ADJ. R-SQRD 0.766 S.D. DEPENDENT VAR 20.513 S.E. OF REG 9.905 SUM SQUARED RESID 4709.255 DURBIN-WATSON STAT 1.785 UN-WEIGHTED STATISTICS R-SQUARED 0.396 MEAN DEPENDENT VAR 4.801 SUM SQUARED RESID 6164.67 DURBIN-WATSON STAT 1.521 TABLE NO. 5 Cross Section Random Effect Model Dependent Variable: GR Method: Panel EGLS (Cross-Section random Weights) Sample: 2005-2009 Total panel (unbalanced) observations: 64 Cross-sections included: 13 Swamy and Arora estimator of component variances VARIABLE COEFFICIENT STD.ERROR T-STAT PROB CONSTANT 1.663 2.777 0.599 0.551 Determinants of Mutual Fund Growth in Pakistan Determinants of Mutual Fund Growth in Pakistan This study is actually about the mutual fund growth and the determinants which are influencing on the growth of these funds. We ask whether the growth of funds is influences by the management fee, family proportion and the expense ratio or not. How much these variables influenced the growth of funds. We further check out the relation of the family assets and the return on the funds with the performance of the funds. Investors are paying the charges to control the funds and for the growth of the funds in the shape of management fee and the administrative charges. We study the behavior and the output of the funds from the duration of 2005-2009. We selected the funds which are listed in KSE. The funds are selected which are in the family proportions because of the nature of regression model which is used for the calculation of the effect of determinants on the growth of the funds. We use two models for the interpretation of the data. These are fixed effect model and cross section model. Through these models we elaborate the effects of different factors on the growth of these funds. We focus on the management fee for checking the efficiency of the funds management. Whether these are contributing in the growth of the funds or not, if not then these fee is only for the benefit of funds management INTRODUCTION In Pakistan the mutual fund industry handles a significant portion of the assets of individual investors. Basically there are many factors which can affects on the growth of the mutual fund. In these determinants of the mutual funds which can affect the growth of the mutual fund we are focusing on the management fee, the main focus is on the charging of the management fee and its impact on the growth. Whether it is beneficial for the growth or not? Along with this we are determining some other major determinants of which can influence on the growth of these funds in Pakistan. Compensation to managers is primarily in the form of a Management fee. With few exceptions, Management fees are charged as a percentage of the assets under management rather than on the basis of performance. It is therefore in the interest of management to grow the total assets in the fund and in the associated fund family. One tool that managers may use to grow funds is the Management fee. The fees, which are l imited to1% to 3% per year as Management fee, are used to cover administrative costs. This paper studies whether or not the charging of a Management fee support the investors by growing the worth of mutual funds family along with that of some other determinants. Next we checked that the charging of Management fee leads to greater cash inflow for the funds which charge them. We focus on various mutual funds existing in the Karachi Stock Exchange and listed there, in order to control for the variety of commission payment schemes associated with management fee charging funds that are now available to shareholders and are in the group of families charging Management fee. LITERATURE REVIEW These are some of the review from the experts and the researchers. Academic opinion on mutual fund fees is generally critical. Bogle, points out that the average cost of owning mutual funds has risen over 100 percent in the last sixty years. Freeman and Brown contend mutual fund advisory fees alone are excessively high. In their view the mutual fund industry is dominated by conflicts of interest where the mutual fund boards fail to negotiate arms-length management contracts with asset managers. In their view asset managers are over compensated for the services that they provide. Similarly Ang, Chen and Lin argue that the primary benefit that managers can provide to the shareholders is the reduction of expenses. The reason is that management has more control over expenses than over any other aspect of the return to the shareholders. Therefore, if managers are not working to reduce expenses they are failing to carry out their primary duty to the shareholders. Golec found that fund managers are compensated primarily on the basis of a percentage of the assets under management. That compensation scheme provides fund managers with a strong incentive to grow fund assets regardless of the degree to which such growth is consistent with shareholder welfare. Collins, along with Livingston and ONeal (1998) and ONeal (1999) argue that some investors pay to receive professional investment advice and assistance in the purchase of mutual funds. Essentially they argue that brokers provide some combination of resolving asymmetric information for investors and providing a needed service in completing and maintaining the required records in order to complete the investing process. We closely examine the issue of whether brokers primarily resolve asymmetric information or primarily provide investors with record completion and maintenance services. One way to grow the assets is to well manage the fund by the fund management of that varies funds. Management f ees provide a source of funds for controlling and managing the funds. Naim Sipra (2008) one of the interesting things to note is the low correlation between the funds and the market portfolio. In US studies the correlation between the market and mutual funds is often 0.9 or above. A high correlation with the market is an indication of a high degree of diversification. The low correlation in the Pakistani case suggests that the mutual funds are not doing a very good job of diversification. The low correlation and also the low betas are probably due to inclusion of fixed income securities such as the Term Finance Certificates (TFCs) in the portfolios of these funds. Since the composition of the funds is not publicly known therefore it is not possible to analyze this issue any further. Ali S M, Malik A S (2006) A Capital markets play a vital role in the economic development of a country. It is now widely accepted that there is a direct correlation between economic growth and the development of the financial sector. Mutual funds are considered to be an imp ortant source of injecting liquidity into the capital markets. A well established financial intermediation system facilitates the economic activity by mobilizing domestic as well as foreign savings. Muhammad Akbar Saeed (2004) during the last two years, mutual fund sector has more than tripled in size to Rs. 112 billion (as of 31-Dec-04). The industry players are predicting that the business is likely to grow by 200 percent over the next five years. The success of the industry will lie in several factors, one of which will be the role of regulators and their efforts to continuously evolve the code of corporate governance for the mutual fund industry. Moeen Cheema and Sikandar A. shah (2006) Mutual funds are becoming vehicles of securities investments most favored by the general public worldwide. Whereas, this trend is more pronounced in the developed securities markets of the United States of America and Europe, mutual funds are increasingly gaining the public attention in the developing economies as well. Pakistan is not an exception to this global trend and even though mutual funds form a comparatively small segment of the securities markets, they have grown phenomenally over the last few years. According to the Mutual Fund Association of Pakistan (MUFAP), whereas mutual funds may not shield investors from the risks associated with overall market failure, the ability to diversify that they provide may reassure public investors as regards the failure of individual companies and hence make them less wary of insider opportunism in any given corporation. We similarly consult some of the related articles for this purpose, which can be seen from the references. We also consult some of the conflicting matters with the course instructor. In summary, Management fee is basically for the controlling of the mutual funds and for the growing purpose of the funds. But is it working well for the growth of the mutual funds which funds are being charging this fee. HYPOTHESES AND METHODOLOGY This paper studies whether the shareholders income and their wealth increase from the growth of the mutual funds through the charging of Management fees. The main focus on the Management Fee but there are some other determinants like family proportion, expense ratio, return through sharp ratio and assets turnover in that specific duration which we selected for the research purpose. There are a number of ways in which investors could enjoy by the growing of wealth from funds which charge this fee. Since the fee is used for administrative expenses. It could aid investors by making them aware of high quality managed funds that might otherwise be invisible to them. There are several possible examples of funds where this might apply. First, funds charging this management fee lead the higher total returns. Funds with greater total returns would benefit investors in that, if the superior performance was persistent, investors would have a higher terminal wealth from investing in these funds than they would have from investing in other funds. A fee showing the existence superior total returns would be of great of interest to investors. The null hypothesis: Ho: There is no difference between the total returns of mutual funds that charge the Management fee and those that do not charge the Management fee will be tested. Second, the Management fee might be a signal to investors of a greater risk adjusted rate of return. A greater risk adjusted return would imply that investors could earn superior returns with less chance of loss with respect to other portfolios offering the same level of return. The second null hypothesis to be tested is: Ho: There is no difference in risk adjusted returns between the risk adjusted return of mutual funds that charge the Management fee and those that do not charge the Management fee. 2nd hypothesis will be tested using Sharpe Ratio. It needs to be noted that these null hypotheses could be rejected either because the funds charging the Management fee over perform or because they under perform. If there is persistent over performance, the over performance is in the interest of the investors. However, persistent under performance would mean that the fee being paid by the investors is being used to let them know that these mutual funds are not performing well that will leave the investors with less terminal wealth. Such a result would be consistent with the view that Management fees are inconsistent with shareholders income growth. Third, the funds charging the Management fee could be the funds that have lower expense ratios. The numerator of the expense ratio includes all of the operating costs of managing the fund; including the management fee and other administrative costs as well as all the expenses. It may be that after the Management fee is removed from the expense ratio the fund has lower expenses than other funds. Such a result would support the idea that the fee itself is merely a substitute for other costs and that the investor in such a fund is no worse off, and could be better off than the investor in a fund that does not have the fee. The null hypothesis to be tested is: Ho: There is no difference of the expense ratios of the funds on the growth of the mutual funds. 3rd hypothesis will be tested after subtracting the Management fee from the expense ratio. The null hypothesis could be rejected because the funds charging the fee have lower expense ratios or because the funds charging the fee have greater expense ratios. In the first case the management fee would be in the interests of shareholders and in the second case the fee would not be in the interests of shareholders. If it is found that the management fee is not supporting the growth of the mutual funds of shareholders, the other alternative is that the fee is in the favor of the fund management. It would be in the interest of fund management to charge the management fee if the existence of the fee led to faster asset growth than could otherwise be expected. Management desires faster asset growth because of the manner in which management is compensated. Fourth, managers might be using management fees to grow funds more rapidly than they would otherwise be growing. The growth of the fund from time t to t+1 is defined as: Gi = (Assetst Assetst -1(1+R))/Assetst -1 (1)†¦Ã¢â‚¬ ¦Equation Where Gi is the growth rate in the assets under management by fund i from time t-1 to time t. Assetst are the net assets under management at time t. Since the assets under management may grow either due to new sales or returns, equation 1 eliminates the growth that is due to returns. For all of the funds in the study, the management fee is based on the net assets under management which may provide a managerial incentive to grow the fund as rapidly as possible. Ho: The growth rate of mutual funds that charge management fee is higher as compare to the funds which are not charging the fee. We will test whether the funds that charge the fees actually are growing faster using a regression model that controls for risk adjusted return, asset turnover rate, the relative size of the mutual fund within a family of funds, the expense ratio of the fund other than the management fee and the level of the management fee. Gi = ÃŽ ² 0 + ÃŽ ² 1RARi + ÃŽ ² 2ATi + ÃŽ ² 3ASSETi + ÃŽ ² 4FAMPROi + ÃŽ ² 5ERi + ÃŽ ² 6FEEi + ÃŽ ² i †¦2) Equation Gi is the growth due to new investment in funds i from previous year t to current year t+1. Growth is defined by equation 1. This sign (?) Measures the sensitivity of the growth rate of the mutual fund to the specified factor in each case. An expected positive sign means that the growth rate is expected to respond positively to increases in the variable. An expected negative sign means that the growth rate is expected to respond negatively to increases in the variable. The expected sign is specified for each of the control variables. RARi is the risk adjusted returns on fund i from year t to t+1, estimated by using the Sharpe Ratio. In accordance with past findings, this control variable is hypothesized to have a positive sign and does take a positive sign. ATi is the asset turnover for fund i which is measured through the formula of Net Income divided by the Total Assets. Turnover is a measure of investing activity. The greater the turnover, the greater the cost of operating the fund. Holding all else equal, the greater the cost of operating the fund the lower the growth in the fund. This variable is hypothesized to have a negative sign and does have a negative sign. ASSETi is the total assets of fund i at time t. The larger a fund, generally, the older the fund is so that assets serve as a proxy for the age of the fund. The older a fund, the more well known the fund is to the investing public and the easier it will be to sell the fund. Assets are expected to and do have a positive relation with growth. FAMPROi is the proportion of the mutual fund family assets made up by fund i. The larger the proportion of the family assets in the fund the slower will be the growth, as management efforts will be directed primarily at the newer, smaller funds. This variable is expected to have a negative sign and generally has a negative sign. ERi is the expense ratio of fund i , less the management fee from all the expenses. The expense ratio includes all of the costs that the management company charges to the fund including the management fee, trading costs, and any other expenses. Since the purpose of the test is to isolate the effect of the management fee, that fee is subtracted from the expense ratio. The greater the expense ratio, the lower the growth. Investors should prefer a lower cost fund to a higher cost fund. The variable generally has the expected negative sign. FEEi is the level of the Management fee. For the vast majority of the funds in the study, this variable will be charged by 1% to 3%. It is expected that the null hypothesis will be rejected and that this variable will have a positive sign which is generally the case. The regression model (Equation 2) is estimated on an annual basis for the years 2004 through 2009 for all funds that have all required data available. Equity and fixed income funds are examined separately. A positive and significant sign on the FEE variable will lead to a rejection of the null hypothesis and will be consistent with the idea that the Management fee is used by management to increase growth in assets. There are two economic rationales that apply to the imposition of the Management fee on mutual fund investors. The first is that investors are the primary beneficiaries. The second is that fund management is the primary beneficiary of the fee. The major contribution of this paper is to determine whether the facts are more consistent with the investors or the managers being the beneficiaries for mutual funds. THE DATA All of the data are taken for the years 2004 through 2009. Since 2004 is the first year and lagged data is needed, the results are presented for all funds for which all data was available for 2005 through 2009. The data are summarized in the table form and data is regarding the equity funds. As far as the collection of the data is concerned so we consult many sources for the collection of the data. Mainly we collect it from KSE. From where the full data was not available and after that we consult the Business recorder, Statistical Bulletin of Pakistan [Federal Bureau of Statistics (2005)] for 2005-2009 and SBP for the collection of the financial reports and the kibor rates. The net asset values are collected from the KSE as well as from Brecorder. The data available in the form of tables and excel sheet which is attach along with this article. Mainly we collect the data of the equity mutual funds. Our focus was on most commonly known mutual funds of the Pakistan market. We selected a lmost 21 mutual funds from the KSE available sources but because of the running of Regression Model, for which we need only the family funds which are in the form of groups. We neglect the individual funds because of the family proportion concern. So now the data available is of 13 mutual funds which are in the form of family. From that we could generate the family proportion of the mutual funds assets. Because the amount of the data was less for five years so we take the data in the panel form representing through panel EGLS. RESULTS These are some of the results which we conclude from the help of the CROSS SECTION MODEL FIXED EFFECT MODEL. In econometrics and statistics, a fixed effects model is a statistical model that represents the observed quantities in terms of explanatory variables that are all treated as if those quantities were non-random. This is in contrast to random effects models and mixed models in which either all or some of the explanatory variables are treated as if they arise from the random causes. Often the same structure of model, which is usually a linear regression model, can be treated as any of the three types depending on the analysts viewpoint, although there may be a natural choice in any given situation. In panel data analysis, the term fixed effects estimator (also known as the within estimator) is used to refer to an estimator for the coefficients in the regression model. If we assume fixed effects, we impose time independent effects for each entity that are possibly correlated with the regressors. The major attraction of fixed effects methods in non-experimental research is the ability to control for all stable characteristics of the individuals in the study, thereby eliminating potentially large sources of bias. Within-subject comparisons have also been popular in certain kinds of designed experiments known as changeover or crossover designs (Senn 1993). In these designs, subjects receive different treatments at different times, and a response variable is measured for each treatment. Ideally, the order in which the treatments are received is randomized. The objective of the crossover design is not primarily to reduce bias, but to reduce sampling variability and hence produce more powerful tests of hypotheses. Fixed effects methods cannot estimate coefficients for variables that have no within-subject variation Time-series cross-section (TSCS) data harness both cross-temporal and cross spatial variation to maximize empirical leverage for theory evaluation. However, this powerful data structure also requires careful consideration of temporal and spatial (cross-unit) heterogeneity, temporal and spatial dynamic processes, and potentially complex stochastic error structures. In the table 1 which is descriptive table and that is showing the mean, median and standard deviation as well. As it is clear and shows from the descriptive table that the sharp ratio, which is basically the return calculation through the sharp measure, is the negative impact on the growth of the mutual fund. As you will increase the return on the funds or the return increases over the amount of the funds the impact of it is negative on the growth of the mutual fund. Similarly the coefficient of this sharp ratio is also negative impact on the growth of the mutual funds. Now secondly, the asset turnover showing, the mean in the descriptive table representing the negative value which means that if the asset turnover will be negative so it can reduce the growth of the mutual funds. Assets are in the positive form and they show that if the asset of the fund increases so it means that the impact of this on the growth of the fund is positive and it contribute in the growth of the mutual fu nd. The family proportion of the mutual fund should have the positive impact on the growth of the mutual fund and in the table 1 of the descriptive result, the result of this is positive so it means that the family proportion increasing in this which is the positively impacting on the growth. Expense ratio is resulting negatively on the growth of the funds, and the management fee which is the basic testing of this is also showing the negative impact on the growth of the mutual funds in Pakistan. TABLE NO. 1 Descriptive Analysis GR SR AT ASSET FP ER FEE MEAN 3.989 -1.096 -0.008 2633207 0.365 1.262 54455166 MEDIAN 0.005 -0.540 0.010 1435134 0.410 1.260 38342000 MAX. 63.590 2.290 0.450 14193216 1.000 10.900 2.49708 MIN. -27.660 -5.010 -1.070 0.00000 0.000 0.000 0.00000 STD. DEV 12.763 1.470 0.272 3060791 0.255 1.644 53774795 SKEW. 2.134 -0.946 -1.834 1.951847 0.187 4.008 1.599424 PROB. 0.000 0.004 0.000 0.0000 0.729 0.000 0.0000 SUM 259.290 -71.278 -0.525 1.71608 23.400 82.060 3.54709 OBS. 65 65 65 65 65 65 65 TABLE NO. 2 Correlation Matrix DETERMINANTS GR SR AT ASSETS FP ER FEE GR 1.000 -0.269 -0.578 -0.163 0.062 0.100 -0.146 SR -0.269 1.000 0.360 0.124 0.174 -0.186 0.132 AT -0.578 0.306 1.000 0.139 0.071 -0.403 0.125 ASSETS -0.163 0.123 0.193 1.000 0.503 0.084 0.972 FP 0.061 0.174 0.071 0.503 1.000 0.270 0.538 ER 0.100 -0.187 -0.403 0.084 0.270 1.000 0.058 FEE -0.146 0.133 0.125 0.972 0.538 0.058 1.000 Now further according to the table 3 which is Fixed Effect Model, we design a panel least squares method in this model for the calculation of the data, in that the sharp ratio is resulting in the negative form and show the result that as the return on the mutual funds increases the growth effected negatively. The coefficient of the sharp ratio is negative and the result is showing significance, which is acceptable. After that assets turnover of it is in negative figure which shows a negative impact on the growth and the prob. Is significance we are keeping the level of the significance here is 0.10. The coefficient of the family proportion is positive thats good for the growth of the mutual fund but it is not significance because the prob. is higher than the level of significance. The expense ratio is showing the negative result, which means that the increase of the expense ratio is a negative impact on the growth of the mutual funds. Its coefficient value is negative and the value i s significant according to the fixed effect model. Now comes the management fee, according to this model the management fee is resulting in the positive value for the fund, that means that the funds that using the Management fee are contributing in the better growth of the fund because the coefficient value is positive but according to this model the fee is not significant here, the result is that the funds charging the fee can make the funds growing as compare to the funds that are not charging the management fee. The factor we assume here that the management fee effect positively for the growth of the funds but because of the political instability and the country economic situation it is not resulting good in the growth of the mutual funds in Pakistan. Lastly according to this model, value of Lassets is positive and the significant level is good which shows the Lassets significant. We take the assets here despite of the assets because of the mismatch and not the proper results fro m the assets. So it is impacting positively on the growth of the mutual fund. If it increases the mutual fund growth will increase. TABLE NO. 3 Fixed Effect Model Dependent Variable: GR Method: Panel Least Squares Sample: 2005-2009 Total panel (unbalanced) observations: 64 Cross-sections included: 13 DETERMINANTS COEFFICIENT STD. ERROR T-STATISTICS PROB. SR -3.772 1.532 -2.462 0.018 AT -24.784 7.253 -3.417 0.001 LASSET 0.447 0.155 2.878 0.006 FP 4.932 9.653 0.512 0.612 ER -2.250 1.054 -2.135 0.038 FEE 1.637 1.427 1.144 0.258 CONSTANT -1.456 4.251 -0.343 0.734 EFFECTS SPECIFICATIONS CROSS-SECTION FIXED (DUMMY VARIABLES) PERIOD FIXED (DUMMY VARIABLES) ADJUSTIFIED R-SQUARED 0.438 MEAN.DEP BAR 4.051 S.E OF REGRESSION 9.639 S.D. DEP BAR 12.859 SUM SQUARED RESID 3810.045 SCHWARZ CRITERION 8.418 LONG LIKELIHOOD -221.580 F-STAT. 3.227 DURBIN–WATSON STAT 1.896 PROB F-STAT 0.000 In table 4 and 5, we use the CROSS SECTION MODEL (cross section random effects cross section weights), according to both of these methods the calculations are same, the coefficient values and the significant are same. The assets turnover is showing the negative value which shows according to it that the more assets turnover can impact the growth of the mutual funds and the value is significant in both methods as well as in the fixed effect model. The value of the sharp ratio means the return of the mutual fund is showing coefficient negative in the random effect method that means that the increase of the return value can effect the growth negatively and growth is less when this return value is high while the value is significant which means it is good for the growth of the mutual fund and same value is showing in the fixed effect method. But in the cross section weights method the value of the return is positive and it is not significant there. So it shows here a that the higher ret urn impact the mutual fund growth positively means higher the return higher the growth of the mutual fund nut it is nit the case here. Family proportion of the mutual funds according to the both methods says that the results are showing positive relationship in the growth of the funds and the higher the family proportion. The values are significant according to the probability measures. Expense ratio according to both of these models reflects the results that expense ratio is impacting the growth of the funds negatively. Means as the ratio of the expense increase the growth is going to be less for the mutual funds. The coefficient value of the expense ratio is in negative value and the value in both the methods shows that this is significant. As far as the Management fee is concerned here so according to the both methods the management fee is impacting on the growth inversely. The coefficient value in both the cases is negative means if the management fee is charged by the mutual fu nd management so the growth is less than if they dont charge the management fee. And the value is significant in both the methods. So it is clear from now that according to the Cross Section Model the impact of the management fee is negative on the growth of the mutual funds. The management who is charging the management fee their growth of the mutual funds is less and downward. TABLE NO. 4 Cross Section Weights Dependent Variable: GR Method: Panel EGLS (Cross Section Weights) Sample: 2005-2009 Total panel (unbalanced) observations: 54 Cross-sections included: 13 Linear Estimation after One-Step Weighting Matrix VARIABLE COEFFICIENT STD.ERROR T-STAT PROB SR 0.439 0.825 0.532 0.596 AT -32.916 3.815 -8.628 0.000 FP 4.404 3.353 2.506 0.016 ER -2.032 0.719 -2.825 0.006 FEE -5.297 1.997 -2.665 0.010 LASSET 0.447 0.155 2.877 0.006 WEIGHTED STATISTICS R-SQUARED 0.788 MEAN DEPENDENT VAR 7.211 ADJ. R-SQRD 0.766 S.D. DEPENDENT VAR 20.513 S.E. OF REG 9.905 SUM SQUARED RESID 4709.255 DURBIN-WATSON STAT 1.785 UN-WEIGHTED STATISTICS R-SQUARED 0.396 MEAN DEPENDENT VAR 4.801 SUM SQUARED RESID 6164.67 DURBIN-WATSON STAT 1.521 TABLE NO. 5 Cross Section Random Effect Model Dependent Variable: GR Method: Panel EGLS (Cross-Section random Weights) Sample: 2005-2009 Total panel (unbalanced) observations: 64 Cross-sections included: 13 Swamy and Arora estimator of component variances VARIABLE COEFFICIENT STD.ERROR T-STAT PROB CONSTANT 1.663 2.777 0.599 0.551

Holding Media Accountable

Holding Media Accountable Question: Are the news media adequately accountable for their reporting? Is there a need for legislative reform? There is a common concern that the news media in the modern age is no longer being held accountable for its reporting; that is, not fulfilling the expectation that it behaves in a certain way that contributes to the public good (particularly in relation to the political sphere). Since the late 17th century the medias vital role in democratic governance has been evident as a result of its significant power and function to oversee the actions of the government (Schultz 1998). To this day this role of the media remains to be a fundamental aspect of both modern democratic theory and practice. In this essay, the news medias general role in a democracy will be examined, such as the way in which it promotes it and its impact on the protection of human rights. Additionally, the various constraints in certain democracies that can limit the medias ability to always hold a positive role will be explored in order to expose possible legislative reforms to enhance media accountability. Finally, th e ways in which the media is used in order to support development and democracy will be examined, such as its historical victories in exposing government corruption and instigating reconciliation between warring groups. Whether or not the news media is adequately accountable for its reporting depends on the particular democracy in which it exists as they can vary greatly. This essay will contend that in developed democracies (such as Australia) the medias accountability can be perceived as adequate at this point in time, however it will also acknowledge that legislative reform is certainly needed in many other democracies that are less established. Democracy is near impossible to be achieved without a free press; through playing a myriad of key roles that will be discussed an adequate level of accountability to the public can be maintained for the medias reporting. The press is widely called the Fourth Estate to describe it as a somewhat additional branch of government that ensures those governing are kept in check (Schultz 1998). Without the providing of this check and balance, governments cannot truly be effective. Thomas Jefferson as a key historic governmental figure supported this idea, arguing that the truth of any matter will only emerge through the exchanging of information via the press (Holmes 1991). The notion of the media being a watchdog is widely accepted; that is, it acts as a guardian of the public interest that ensures citizens are consistently well informed on the actions of political officials and institutions (Schultz 1998). Particularly in those democracies that are less developed where legislatures and jud iciaries are either powerless or corrupt, the media is often left as the last bastion against the abuse of power (Schultz 1998). Furthermore, the presence of the media provides for a vital arena of public debate between those that govern and the governed. This increased level of debate not only ensures that every citizen is given the opportunity to contribute, but it also allows for enhanced decision making due to the collaboration of many different views and ideas (Holmes 1991). In contrast (for further elaboration), during authoritarian rule, obviously the quality of the laws and policies established were significantly lower due to minimal discussion and debate and the absence of a free and accountable media to help build a civic culture (Schultz 1998). Sen (1999 Pg 43) described critical public discussion to be an extremely important requirement [for] good public policy. Additionally, the medias accountability is particularly evident when one looks at disaster. Sen (1999) makes a further point in relation to this, asserting that a free press in a functioning democracy contributes greatly through the spread of information (which somewhat acts as an early warning system) that can significantly impact policies for (e.g.) famine prevention. The United Nations Development Programme (1997) adds to this, contending that if (for example) poverty is to be addressed, equally as important is the transfer of information to those in need. This is due to the fact that it would allow for them to participate in the political process and public life; it is difficult for an individual to assert their rights if they dont even know they exist. Through the media involving those that are marginalised, their views and issues become part of public debate, and thus the likelihood that these views be addressed is obviously far more likely than if they remain unheard (Sen 1999). The media plays a very important role via its accountability in a democratic society; nonetheless constrai nts do exist in some democracies that attempt to compromise this role. Particularly in newly established democracies, the reality is that the medias accountability can be affected negatively, prompting the potential need for legislative reform. Despite constitutional guarantees, in many democracies the media is greatly restricted by over-bearing laws, monopolistic ownership, and sometimes even physical force. In 2002, 136 journalists were imprisoned and 20 were killed as a result of their reporting in new democracies not satisfying the authorities (Committee to Protect Journalists 2003). In addition to state control constraints, a mostly global trend is beginning to dominate media markets in the modern age as a result of increased organisational competition. This involves a dumbing down of the news; in other words, an increased focus on shallow and sensational topics that aim more so to entertain rather than inform audiences of matters that are far more important (Selizer 2004). Consequently, public discourse is also negatively impacted as populations r espond to this dumbed down news that they are receiving (Selizer 2004). So not only does this modern worldwide trend compromise media accountability to the public, it also affects the publics own ability to recognise good news from bad news, making demands for change far less likely to substantiate. Moreover, in many countries ownership of the media is often controlled by just a few large dominating corporations that have taken over all smaller news organisations. With this high concentration of media ownership, there is not only minimal diversity but also strong biases in the news being presented to us (Djankov 2001 et al). Media tycoons (particularly in new democracies) tend to use their broadcast stations or newspapers to pursue their own vested interests such as the promotion of their business interests and political agenda (Djankov 2001 et al). In essence, the interests of these few people are manipulating the media through themselves determining the content that is to be publi cised. In order to address some of these constraints on the media, recommendations can certainly be made to attempt at instigating action for change where it is needed. For instance, sometimes the media is targeted by particularly powerful people and groups that endeavour to silence it to benefit their own interests. Primarily in developing democracies where (for example) strict licensing requirements may be demanded of the media, it is of paramount importance that authoritarian laws such as this are repealed and replaced with more liberal legislation (Committee to Protect Journalists 2003). Additionally, legal and judicial reforms are vital to ensure that journalists rights are enforced in court while those that do them harm are prosecuted. Only this way can it be ensured that the media has the freedom to report on important issues and remain accountable to the public. It is to be acknowledged that media laws in developed democracies are certainly far from perfect, and indeed they could be tweaked to improve media accountability. However, the Australian media for example, enjoys a large amount of freedom with guaranteed rights protecting it and is thus significantly safe from harm or stringent laws. As a result, it can be argued that legislative reform is not of immediate importance. A final area to be discussed in this essay is the medias practices that have promoted democracy and positive governance, shedding light on its accountability to the public. News organisations in many countries epitomise the democratic ideal of the media as a tool for information, a public forum, and as an establisher of consensus and harmony. If a society is to be truly democratic citizen participation is paramount; the media acknowledges this through ensuring that the populations are consistently engaged with the latest in the political sphere (Schultz 1998). For example, aiding them to make informed choices in regards to whom they should vote for and the particular policies that should and shouldnt be supported. Through mediums such as public-affairs programs the media provides enough detailed information to equip voters with the ability to be able to critically analyse the political sphere and are thus likely to engage with it far more than they would otherwise be capable of (Schultz 1998). In the modern age of widespread global travel it is especially difficult for a countrys media to inform all of its citizens when they inhabit other areas across t he world (Zelizer 2004). As a result, the use of the internet as a medium for the transfer of information has been adopted and proven to be highly effective. For example, early in the 21st century in the Romanian local elections, a large array of online information portals were established to ensure access to the latest political news was available to even citizens living on the other side of the world (Ulmanu 2000). Once again, this is evidence of the media endeavouring to fulfil its accountability to the public; in this way it is through acting not only as an information tool but as a public forum for critical debate. Also related to this is the way in which the media acts as a builder of peace and consensus. This is relevant because if violence and strife exists within a democratic society, the political process cannot consequently thrive as a result of peaceful critical discussion likely to be non-existent. In many societies the media tends to play a key role in providing method s of mediation to warring groups with the aim of public order being re-taken as promptly as possible (Bambang 2002). Many critics argue that this is not the case, and that the media itself often fuels violence via (e.g.) reporting incorrect facts and reinforcing prejudices (Bambang 2002). For example, in the midst of the mass conflict in Rwanda during the 1990s, a radio station (funded by international donations) was being used by extremists in support of genocide (Bambang 2002). While there are indeed cases in the past that depict poor actions on the medias part in fulfilling its accountability, much has been done to reverse this. For instance, many media organisations worldwide now train their journalists in what is dubbed peace journalism (Bambang 2002). This consists of the promotion of reconciliation via careful reportage that does not take stances on particular topics but rather gives voice to all of the differing viewpoints. Further, peace journalism resists justifications fo r violence, and rather than focusing on the violence itself it magnifies the affects it is having upon innocent individuals and communities (Bambang 2002). Not only this, it also attempts to bridge differences between warring groups in the hopes of a resolution being achieved. In the modern age (particularly in highly developed democracies) this form of reporting is the default method in times of war/crises. It can be concluded that the news media is indeed adequately accountable for its reporting, and at this time it does not need to be a priority to attain further legislative reform. Of course, it is important to recognise that this certainly depends upon the particular democratic society in which is being focused on as they can vary significantly in regards to their medias and their levels of accountability to that particular society. However, in most developed democracies the medias reporting can be perceived as currently adequate. This has been supported in this essay through referring to the various roles the media can be seen to play in the publics interest. It acts as a watchdog (or more formally as the Fourth Estate) in order to ensure the government is kept in check and power is not abused; additionally it often acts effectively as a bridge between the public and the government when there is corruption amongst institutional bodies. It acts as a public arena in which all citizen s are given the opportunity to contribute to the political process; this allows for improved decision making which leads to the establishment of laws that apply to the population as a whole (including those living in poverty that would otherwise have no knowledge (or access) of political participation. Secondly, this essay addressed the various constraints upon the media (particularly in those democracies that are relatively new and less developed). In some of these cases media accountability is not adequate and legislative reform would be ideal to (for example) protect journalists from any form of harm or harassment that compromises their ability to report truthfully and remain accountable to the public. Finally, the media plays the role of an information tool and public forum, educating voters on the latest political updates (regardless of their location) and thus protecting the threads of democracy that citizen participation is central to. In addition to this, such participation is made possible through the media promoting peace and consensus, endeavouring to keep conflict and violence levels low so as to not disrupt the political process and voters vital role in it. The media acts as a very important mechanism for democracy through public accountability. While this can at times be compromised, all in all it is adequate at this time and legislative reform should not be considered a priority. BIBLIOGRAPHY: Bambang Wisudo. P (2002), Broadening Access to Information as a Way of Ending War Journalism, paper presented in a conference on Access to Information in Southeast Asia, Thailand. Committee to Protect Journalists (2003), Attacks on the Press in 2002, New York: Committee to Protect Journalists. Djankov. S, McLeish. C, Nenova. T, Shleifer. A, (2001), Who Owns the Media? Draft paper for the World Bank’s World Development Report. Holmes, Stephen (1991), Liberal constraints on private power? Democracy and the Mass Media, Cambridge: Cambridge University Press, pp. 21-42. Schultz, Julianne (1998), Reviving the Fourth Estate. Democracy, Accountability and the Media, Cambridge: Cambridge University Press. Sen, Amartya (1999), Development and Freedom, New York: Anchor Books. Ulmanu, Alex (2000), â€Å"Romanian Election Enters Net Battleground,† in Online Journalism Review, retrieved from http://www.ojr.org/ojr/technology/1017962590.php. United Nations Development Programme, Corruption and Good Governance: Discussion Paper 3, (1997), published by the Management Development and Governance Division, Bureau for Policy and Programme Support. Zelizer, B (2004), Taking Journalism Seriously: News and the Academy, London: Sage.

Escape Through Dementia in The Yellow Wallpaper by Charlotte Perkins Gi

Escape Through Dementia in The Yellow Wallpaper   Ã‚  Ã‚   Charlotte Perkins Gilman's "The Yellow Wall-paper" is an excellent story on several levels. It works as a suspenseful thriller about the effects of mental illness. It also serves to make several points about feminism and the pervailing attitudes of her time. John, the husband, serves as a metaphor for masculine views of the time, and for the masculine side of humans, the side of reason and logic. "John is practical in the extreme. He has no patience with faith, an intense horor of superstition, and he scoffs openly at any talk of things not to be felt and seen and put down in figures" (1658). His character is almost stereotypical in its adherence to reason and its attittude towards his wife. He negates her intuition; "there is something strange about the house - I can feel it. I even said so to John one moonlight evening, but he said what I felt was a draught, and shut the window" (1658) He attributes her condition to "a slight hysterical tendency" (1658), which is, etymologically speaking, just a polite way of saying that she is instable due to being a woman. He is not interested in his wife's actual condition, rather in his diagnosis; "John does not know how much I really suffer. He knows there is no reason to suffer, and that satisfie s him" (1659). His best advice is to not use her imagination (though trapped in an ugly room), but to become more reasonable and to resist her condition through willpower. When he does put her to bed and asks her to get well, he asks, not for her own self, but with him as the motivation; "He said [. . .] that I must take care of myself for his sake, and keep well" (1663). John is reasonable and educated. He represents a stifling pr... ...eedom from the bars in the pattern. This creeping about is certainly at odds with her husband's requests. It is irrational, in that she thinks she has escaped, when it is actually time to leave for good, and she has locked herself in. She defies his orders of bed rest, physically exhausting herself crawling about and pushing the bed and biting the bed and tearing the wall-paper. She overcomes her husband's forthright sensibility by acting so crazy that he cannot deny it, cannot make sense of it, cannot do anything but faint away, leaving her to crawl right over the top of him. She has escaped his oppression by going into her dementia and embracing it. Works Cited Gilman, Charlotte Perkins. "The Yellow Wall-paper." The Norton Anthology of American Literature. Eds. Nina Baym, et. al. Shorter 5th ed. New York, London: W.W. Norton & Company, 1999: 1656-1669.

America Must Develop Alternative Fuel Vehicles :: essays papers

America Must Develop Alternative Fuel Vehicles A Formula One race car accelerates from 0 to 60 mph in under 3 seconds. How could a car that goes 0 to 60 mph in 12 seconds ever be considered cool? The people at Engine Technology International must be impressed because they’ve crowned the gas-electric hybrid powerplant from the Honda Insight as International Engine of the Year 2000.1 The truth is, with a 95-mpg potential and a 110 mph top speed, the Insight is turning everybody’s head while at the same time giving environmentalists a beacon of hope that the conventional gasoline engine may soon be shown the door. The Sierra Club honored the Honda Insight with its Award for Excellence in Environmental Engineering. This is the first product award ever given by the 108-year-old environmental group.2 We’ve heard about the electric automobile revolution for years, but only now are those promises becoming a reality. With several models available right now from Alabama dealerships, the dawn of the alternative fuel vehicle (AFV) is beginning to touch every corner of the nation. But the most important thing about these new vehicles is their superiority in some aspects to the gas-only cars and trucks we’ve all come to depend on. No longer built just to â€Å"send an environmental message†, the latest breed of vehicle can perform on par with many of the conventional vehicles you see on the road today, while giving its owner the advantages of unbelievably high fuel efficiency and extremely long operating range. The Honda Insight Hybrid EV combines a small 1.0 liter 3-cylinder gasoline engine with a 144-volt NiMH electric motor giving the Insight a range of up to 700 miles, all at a cost of around $20,000.3 With the number of companies in the electric transportation industry embarking on bold new acquisitions, the stage is now set for a more robust and competitive EV market, offering consumers a wider range of alternative modes of transportation. DaimlerChrysler has positioned itself for the future through a strategic purchase of Global Electric MotorCars (GEM), currently the largest producer in the United States of electric vehicles that can be licensed for use on public roads, producing approximately 5,000 units per year. DaimlerChrysler along with Ford Motor Company will soon be the first to sell neighborhood electric vehicles (NEVs) in the United States. Sales and leasing figures for battery and electric-duty light passenger vehicles for the last 4 years have risen from 39 units in 1996 to 1277 units in 1999 with those figures projected to be substantially higher for the year 2000.

Mind and Sportsmanship Essay

Sportsmanship goes beyond playing sports in this generation. The key word for having good sportsmanship is honesty. Sportsmanship plays a role in today’s society not only in sports, but in school and the job industry as well. The way sportsmanship is being taught to the younger generation is also to blame; Such as the media, coaches, and parents. Sportsmanship is sportsman like conduct, as fairness, courtesy, being a cheerful loser. The idea of being on a team is to do your best, work together and use your skills to follow the rules and win fairly. This generation has taken â€Å"Sportsmanship† and turned it into â€Å"winning†. Sports teams have become so obsessed with the idea and feeling of winning, they tend to do anything and everything to accomplish that. In most cases for sports they will try take steroids to up their ability and strength; only to win the game. Not only are steroids illegal, but there are also terrible consequences on your body if you take them. Kids have created a habit in school to cheat so they can get that A on that test so they feel accomplished. Do they really feel accomplished for cheating to get that A though? We have cheated ourselves so much that we start convincing our minds that it is normal to cheat instead of using the sources our teachers give us to learn. Along with children and schooling, it’s the same for grown-ups and the job industry. People now lie on their resumes and applications to get a job that they are possibly not even qualified for. When they get that job they get paid money that someone who is qualified to do better work and is more deserving. This day in age has become a bunch of liars in all reality. People have found it to be easier to lie and get away with it to make them look better instead of just being honest. In the mind that creates a satisfaction because they are looked up upon for the things that they are lying about. This also creates a trust issue between all people. Making bosses feel like they have the need to look their employees up on facebook and such. Parents, coaches, and the media have a huge impact on the younger generation when it comes to stuff like this. The parents now-a-days influence their children to win, win, win. You hardly ever hear anything about sportsmanship from parents, the media or coaches. The coaches are usually thinking more about how to win the game instead of giving all of the team members a chance to play equally. The media are the ones that encourage all of those supplements to lose weight and gain muscle. All of these examples have become worse as time has gone by. People become less caring, honest, and trust-worthy. We need our people to get off of their high horses and be themselves, and just accept themselves for who they are. If we had honest, trust worthy and people that didn’t cheat, ones who used sportsmanship; we would have a better economy, smarter people and a better world.

Nelson Mandela’s Values Essay

It will be hard to believe if a person says â€Å"A man who served twenty seven years in prison, turned out to be one of the greatest presidents our world has seen†. Well this did actually happen and this former president is still living today. Nelson Mandela was born on July 18, 1918 in Transkei, South Africa, he was a leader of the anti-apartheid movement in the 1940s. Mandela was jailed for 27 years for acts of sabotage against the South African state, and shortly after his release from prison he led a multi-racial party for the first time ever in South Africa’s history. By doing this he was elected as the first black/democratic president of South Africa. Throughout his years as a president he has been widely regarded as a symbol of global peacemaking, and he won the Nobel Peace Prize in 1993. His birthday, July 18, has been declared Mandela Day; a global celebration of his legacy. Mandela reached this success and earned the title of a world renowned leader with his values in leadership, standing up for what he believed in, that is in democratic process and his strong disapproval of injustice. Nelson Mandela valued leadership since his early days, considered by many as a revolutionary leader; he helped organize the fight against racism and apartheid in South Africa. (Brink). Mandela witnessed leadership at a young age when observing his guardian supervising tribal decision-making gatherings. Mandela’s guardian listened in silence for days, never voicing his opinion even after everyone’s opinion was heard. After everyone had spoken, his guardian guided the group to reach a consensus. Later, Mandela used this experience to mold his leadership style (Stengel). According to Stengel, Mandela recalled the following lesson regarding leadership from when he was a young cattle herder: â€Å"When you want to get a herd to move in a certain direction,† he said, â€Å"you stand at the back with a stick. Then a few of the more energetic cattle move to the front and the rest of the cattle follow. You are really guiding them from behind.† He paused before sayi ng with a smile, â€Å"That is how a leader should do his work†. Furthermore, Mandela’s strong value for leadership began with him displaying his ability to organize and lead others by helping to create the Youth League of African National Congress (ANCYL) which organized protests, boycotts, petitions, and strikes to end apartheid. Previously the African Nation Congress (ACN), ANCYL’s parent organization, had petitioned the government for years for  equality with little success. However, with increased success of the movement, the government increased violence toward nonviolent protesters and banned the ANC. Mandela and other leaders in the movement had to decide how to respond. In a risky decision, they concluded that nonviolence would no longer be effective and that the ANC needed to continue underground. These actions resulted in the imprisonment of Mandela and many ANC leaders, but this action helped to inspire others and to prepare the country for change (â€Å"Nelson Mandela, African National Congress (ANC), and South Africa.†).After more than twenty years in prison, Mandela decided it was time to take matters into his own hands. He realized that, as a leader, it was time to take a drastic step, and he met with the South African president in order to discuss his release and his desire to s witch the nation to a democracy. Mandela was successful, and upon his release he was elected the first democratic leader of South Africa (Brink). Mandela always stood up for what he believed in; he was never fazed by an opponent. Mandela’s value of believing in the democratic process is an example. Even though many did not always agree with this idea, he believed it was the right way forward (Johnson). He was at first unsuccessful with his pursuits, this included the time when he tried during his imprisonment to have prisoners to be addressed more respectfully by guards, and also later when he attempted to have the national voting age lowered to 14 (Stengel). But slowly he established his foundation of democracy and people were finally drawn to it (Stengel). Throughout his battle against apartheid and helping to bring democracy to South Africa, Mandela adopted a democratic leadership style (Johnson).And according to Johnson â€Å"Democratic leaders set policies through group discussion and decision, encourag ing and helping group members to interact, requesting the cooperation of others† and this was exactly what Mandela did (Johnson). Mandela’s other key value that supported his leadership and democratic style was his strong disapproval for injustice. Mandela never tolerated injustice; he believed that justice was the only path to success. For instance, when Mandela got to Robin Island where he was to be imprisoned, he was told to jog to the prison gate. He firmly refused and started a hunger strike with other inmates to condemn the condition they were living in. This worked out in their favor and the conditions improved (Hume). This example highlights Mandela’s value for denouncing injustice and  oppression. Nonetheless, Mandela believed Consensus to be the superior decision making process to build commitment and motivation in group members toward group objectives. Using Consensus meant that justice would be served at its best when making a decision and Mandela fully supported this process (Johnson). Ultimately, Nelson Mandela is viewed as a revolutionary leader for his ability to empower and motivate others using his strong regard for consensus and the democratic process. His stance for promoting justice and peace has been hailed across the world. He led South Africa from a white supremacist country to being the first democratic nation in Africa. With these values Nelson Mandela reached the ultimate success in the eyes of everyone. Work cited Brink, Andre. â€Å"Nelson Mandela.† Time. Time, 13 Apr. 1998. Web. 25 Nov. 2012. . Hume, Tim. â€Å"Digital Mandela Archive Spreads Message of Social Justice.† CNN. Cable News Network, 28 Mar. 2008. Web. 24 Nov. 2012. l. Johnson, Caleb. â€Å"A Leader’s Nest† New York Times [New York] 1993: Gale Virtual Reference Library. Web. 23 Nov. 2012. . â€Å"Nelson Mandela, African National Congress (ANC), and South Africa.† Cold War Museum. The Cold War Museum, 17 May 2009. Web. 25 Nov. 2012. . Stengel, Richard. â€Å"Mandela: His 8 Lessons of Leadership.† Time. Time, 09 July 2008. Web. 24 Nov. 2012. .