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Finding information in obvious places: Work connections and mutual fund investment ideas

Author

Listed:
  • Genc, Egemen
  • Shirley, Sara E.
  • Stark, Jeffrey R.
  • Tran, Hai

Abstract

Mutual funds with managers who share a work connection have greater overlap in portfolio holdings, equity purchases, and equity sales. This relationship develops after a work connection begins and persists after the connection ends. Several tests to mitigate endogeneity concerns provide supportive evidence of a causal interpretation that work connections lead to the sharing of investment ideas among mutual fund managers. Tests on reciprocal trading suggest that quid pro quo expectations motivate managers to share valuable investment ideas.

Suggested Citation

  • Genc, Egemen & Shirley, Sara E. & Stark, Jeffrey R. & Tran, Hai, 2023. "Finding information in obvious places: Work connections and mutual fund investment ideas," Journal of Financial Markets, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:finmar:v:63:y:2023:i:c:s138641812200057x
    DOI: 10.1016/j.finmar.2022.100767
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    References listed on IDEAS

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    More about this item

    Keywords

    Mutual funds; Work connections; Social connections; Quid pro quo;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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