Finding information in obvious places: Work connections and mutual fund investment ideas

Egemen Genc, Sara E. Shirley, Jeffrey R. Stark and Hai Tran

Journal of Financial Markets, 2023, vol. 63, issue C

Abstract: Mutual funds with managers who share a work connection have greater overlap in portfolio holdings, equity purchases, and equity sales. This relationship develops after a work connection begins and persists after the connection ends. Several tests to mitigate endogeneity concerns provide supportive evidence of a causal interpretation that work connections lead to the sharing of investment ideas among mutual fund managers. Tests on reciprocal trading suggest that quid pro quo expectations motivate managers to share valuable investment ideas.

Keywords: Mutual funds; Work connections; Social connections; Quid pro quo (search for similar items in EconPapers)
JEL-codes: G23 G28 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finmar:v:63:y:2023:i:c:s138641812200057x

DOI: 10.1016/j.finmar.2022.100767

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