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Birth order and fund manager’s trading behavior: Role of sibling rivalry

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  • Agarwal, Vikas
  • Cochardt, Alexander
  • Orlov, Vitaly

Abstract

Using rich data on familial background of US mutual fund managers, this paper sheds light on the formation of risk preferences by investigating birth order effects. Consistent with sensation-seeking behavior, we find that managers who are born later in the sibling hierarchy take more risks but perform worse relative to lower-birth-order managers. Later-born managers take more extreme style bets, hold more lottery stocks, churn their portfolios more, and engage in more civil and regulatory violations. These birth-order effects are more pronounced when parental resources are limited and age spacing is lower between siblings, suggesting sibling rivalry as a potential mechanism.

Suggested Citation

  • Agarwal, Vikas & Cochardt, Alexander & Orlov, Vitaly, 2025. "Birth order and fund manager’s trading behavior: Role of sibling rivalry," Journal of Corporate Finance, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:corfin:v:95:y:2025:i:c:s0929119925001208
    DOI: 10.1016/j.jcorpfin.2025.102852
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    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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