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The impact of work group diversity on performance: Large sample evidence from the mutual fund industry

Author

Listed:
  • Bär, Michaela
  • Niessen, Alexandra
  • Ruenzi, Stefan

Abstract

This paper investigates the impact of work group diversity on performance. Analyzing a uniquely large sample of management teams from the U.S. mutual fund industry we find that the influence of diversity on performance depends on the dimension of diversity that is analyzed. Informational diversity has a positive impact on performance, which is driven by tenure diversity as well as educational diversity. Social category diversity has a negative impact on performance, which is mainly driven by gender diversity while age diversity has no strong impact. Our results have important implications for the optimal composition of work groups and for investment strategies of fund investors.

Suggested Citation

  • Bär, Michaela & Niessen, Alexandra & Ruenzi, Stefan, 2007. "The impact of work group diversity on performance: Large sample evidence from the mutual fund industry," CFR Working Papers 07-16, University of Cologne, Centre for Financial Research (CFR).
  • Handle: RePEc:zbw:cfrwps:0716
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    File URL: https://www.econstor.eu/bitstream/10419/57751/1/714986003.pdf
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    References listed on IDEAS

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    1. Niessen, Alexandra & Ruenzi, Stefan, 2007. "Sex matters: Gender differences in a professional setting," CFR Working Papers 06-01, University of Cologne, Centre for Financial Research (CFR).
    2. Prather, Larry J. & Middleton, Karen L., 2002. "Are N+1 heads better than one?: The case of mutual fund managers," Journal of Economic Behavior & Organization, Elsevier, vol. 47(1), pages 103-120, January.
    3. Dora L. Costa & Matthew E. Kahn, 2003. "Cowards and Heroes: Group Loyalty in the American Civil War," The Quarterly Journal of Economics, Oxford University Press, vol. 118(2), pages 519-548.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Salau ABDULMALIK O. & Ayoib CHE AHMAD, 2016. "Boardroom diversity and audit fees: director ethnicity, independence and nationality," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 14(136), pages 413-413, Aprilie.
    2. Karagiannidis, Iordanis, 2012. "The effect of management team characteristics on risk-taking and style extremity of mutual fund portfolios," Review of Financial Economics, Elsevier, vol. 21(3), pages 153-158.
    3. Michela Rancan, 2013. "The Value of Social Networks in Financial Markets," RSCAS Working Papers 2013/21, European University Institute.

    More about this item

    Keywords

    Diversity; Teams; Gender; Mutual Funds; Performance;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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