Brown, Stephen; Goetzmann, William; Liang, Bing; … - In: Journal of Financial Economics 103 (2012) 2, pp. 221-234
This paper studies operational risk in the hedge fund industry using due diligence reports. Many funds suffer from … internal processes to derive a canonical correlation-based measure for operational risk consistent with the Basel definition …. It controls for selection bias using an extension of Heckman's (1979) procedure. Operational risk increases the …