Longer Tenure, Greater Seniority, or Both? Evidence from Open-End Equity Mutual Fund Managers in Taiwan

Jen Sin Lee (), Shyan-Rong Chou and Ying-Jen Chen
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Jen Sin Lee: Department of Finance, Postgraduate Programs in Management, I-Shou University, 1, Section 1, Hsueh-Cheng Rd., Ta-Hsu, Kaohsiung County, 840, Taiwan
Shyan-Rong Chou: Department of Finance,PhD Student, Postgraduate Programs in Management, I-Shou University, 1, Section 1, Hsueh-Cheng Rd., Ta-Hsu, Kaohsiung County, 840, Taiwan
Ying-Jen Chen: Department of Finance,PhD Student, Postgraduate Programs in Management, I-Shou University, 1, Section 1, Hsueh-Cheng Rd., Ta-Hsu, Kaohsiung County, 840, Taiwan

Asian Academy of Management Journal of Accounting and Finance (AAMJAF), 2008, vol. 4, issue 2, 1-20

Abstract: In this paper, we investigate the relationship between a fund manager's characteristics and performance, focusing on the interrelationships among fund managers' tenure, seniority and performance in the Taiwan open-end equity mutual fund market. To our knowledge, this is the first study to look into the joint impact of tenure and seniority. By sorting managers both by tenure and seniority, we are able to estimate the extent to which the interaction between the two variables may impact performance. This study suggests that a manager who has been in charge of a fund more than 24.33 months tends to perform well. Moreover, increasing seniority is found to be associated with decreasing performance. This may be explained by the observation that managers with greater seniority also tend to be older, and advanced age negatively impacts performance. Therefore, fund managers with high tenure and low seniority may potentially give rise to better performance than their peers.

Keywords: tenure; seniority; performance; manager characteristics; fund features JEL Classifications: (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:usm:journl:aamjaf00402_1-20

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