Year: 1998
Type: report
Abstract: We examine the labor market for mutual fund managers. Using data from 1992–1994, we find that termination is more performance-sensitive for younger managers. We identify possible implicit incentives created by the termination-performance relationship. The shape of the termination-performance relationship may give younger managers an incentive to avoid unsystematic risk. Direct effects of portfolio composition may also give younger managers an incentive to herd into popular sectors. Consistent with these incentives, we find that younger managers hold less unsystematic risk and have more conventional portfolios. Promotion incentives and market responses to managerial turnover are also studied.
DOI: 10.3386/w6394
Authors: Judith Chevalier, Glenn Ellison
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3023287100