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Does Culture Influence Asset Managers? Views and Behavior?

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Author Info
Beckmann, Daniela
Menkhoff, Lukas
Suto, Megumi

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Abstract

This research enters new ground by presenting comparative survey evidence on asset managers' views and behavior in the United States, Germany, Japan and Thailand. Relying on Hofstede's four cultural dimensions, we find that cultural differences are most helpful in understanding country differences which cannot be explained by pure economic reasoning. In short, controlling for various determinants, the dimension of more Individualism predicts less herding behavior, more Power Distance leads to older and comparatively less experienced managers in the upper hierarchy, Masculinity brings men into top positions and to higher volumes of assets under personal responsibility, and Uncertainty Avoidance is related to higher safety margins against the tracking error allowed and relatively more research effort. These consequences, i.e. the culturally different importance of herding, age, experience, gender, tracking error and research effort, clearly affect investment behavior, although in a complex way.

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Paper provided by Universität Hannover, Wirtschaftswissenschaftliche Fakultät in its series Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover with number dp-367.

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Length: 35 pages
Date of creation: Jun 2007
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Handle: RePEc:han:dpaper:dp-367

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Related research
Keywords: Asset Managers; Individualism; Power Distance; Masculinity Uncertainty Avoidance;

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Find related papers by JEL classification:
G23 - Financial Economics - - Financial Institutions and Services - - - Pension Funds; Other Private Financial Institutions
G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies
G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
Z10 - Other Special Topics - - Cultural Economics - - - General

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References listed on IDEAS
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Gehrig, Thomas P. & Lütje, Torben & Menkhoff, Lukas, 2008. "Bonus Payments and Fund Managers' Behavior: Trans-Atlantic Evidence," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover dp-411, Universität Hannover, Wirtschaftswissenschaftliche Fakultät. [Downloadable!]
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