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

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  • 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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    References listed on IDEAS

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    Citations

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    Cited by:

    1. João Batista Fraga & Vinícius Augusto Brunassi Silva, 2012. "Board diversity and firm performance: an empirical investigation in the Brazilian market," Brazilian Business Review, Fucape Business School, vol. 9(Special I), pages 55-77, March.
    2. Abdel Moneim Elsaid, 2012. "The Effects of Cross Cultural Work Force Diversity on Employee Performance in Egyptian Pharmaceutical Organizations," Business and Management Research, Business and Management Research, Sciedu Press, vol. 1(4), pages 162-179, December.
    3. 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.
    4. Iordanis Karagiannidis, 2012. "The effect of management team characteristics on risk‐taking and style extremity of mutual fund portfolios," Review of Financial Economics, John Wiley & Sons, vol. 21(3), pages 153-158, September.
    5. Md. Kamrul Islam & Sugandha Mobin Sharna, 2022. "Do board characteristics affect financial performance of firms? An empirical study on Dhaka Stock Exchange (DSE) listed Insurance Companies of Bangladesh," International Journal of Science and Business, IJSAB International, vol. 14(1), pages 1-10.
    6. 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.
    7. Michela Rancan, 2013. "The Value of Social Networks in Financial Markets," RSCAS Working Papers 2013/21, European University Institute.

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    More about this item

    Keywords

    Diversity; Teams; Gender; Mutual Funds; Performance;
    All these keywords.

    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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