Knowing Me, Knowing You? Similarity to the CEO and Fund Managers' Investment Decisions

Konferenzbeitrag

This study provides evidence that investors’ demographic similarity to CEOs affects their investment decisions. We find that mutual fund managers overweight firms led by CEOs who resemble them in terms of age, ethnicity and gender. This finding is robust to excluding educational and local ties and is supported by variation in similarity caused by CEO departures. Investing in firms run by similar CEOs, on average, is associated with superior performance and is more pronounced when CEOs have more impact on their firms. Results suggest that demographic similarity to CEOs facilitates informed trading, implying that investors’ information production incorporates firm management.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2018: Digitale Wirtschaft - Session: Corporate Finance ; No. C13-V3

Classification and Topics

• Classification: Wirtschaft ; Portfolio Choice; Investment Decisions ; Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors ; Demographic Economics: General
• Subject: CEO-investor similarity ; familiarity bias ; information advantages ; investment decisions ; mutual fund performance

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jaspersen, Stefan ; Limbach, Peter
• Event: Veröffentlichung
• (who): ZBW - Leibniz-Informationszentrum Wirtschaft
• (where): Kiel, Hamburg
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/181501
• Last update: 10.03.2025, 11:44 AM CET