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

Vikas Agarwal, Alexander Cochardt and Vitaly Orlov

Journal of Corporate Finance, 2025, vol. 95, issue C

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.

Keywords: Birth order; Mutual fund manager; Sensation seeking; Sibling rivalry (search for similar items in EconPapers)
JEL-codes: G11 G23 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:95:y:2025:i:c:s0929119925001208

DOI: 10.1016/j.jcorpfin.2025.102852

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