The determinants of success within the investment fund industry remain largely unexplored. This study aims to address this lacuna by focusing on the fundamental pillars of the industry: fund administration and asset management. We investigate the critical success factors associated with these areas, specifically examining the roles of taxation, regulation, and the overall business environment for ten countries. Utilizing fuzzy set Qualitative Comparative Analysis, we identify the necessary and sufficient conditions—or combinations thereof—that contribute to success in fund administration. Our findings suggest that the combination of taxation, regulation, and business climate are collectively sufficient conditions for achieving the outcome. In the most parsimonious model, regulation alone emerges as a sufficient condition. Conversely, the absence of regulation is identified as the sole sufficient condition for non-success. In the domain of asset management, however, our analysis does not conclusively link any single condition or combination of conditions to success, influencing the outcome. Furthermore, the study discusses the centers of excellence for the fund administration industry established in Luxembourg and Ireland, highlighting how these countries embody successful agglomeration attributes. Both countries have successfully positioned themselves as hubs for the distribution of international funds within the EU and globally. While Germany and France play significant roles in this regard, they primarily serve as domiciles for funds that are locally distributed and only to a limited extent within the EU and not extensively beyond its borders. Although some studies have identified success factors for different types of investment funds, none have examined the factors influencing the location of an investment fund industry center—covering both fund administration and asset management —using fuzzy set Qualitative Comparative Analysis or any other method. Consequently, this study provides unique insights into these causal configurations leading to agglomeration of fund administration.
Wim Piot (Fri,) studied this question.