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Welcome to the 2018 AFS Annual Meeting, being held this year, in conjunction with FPA in Chicago!
Wednesday, October 3 • 4:45pm - 5:45pm
J3b - The Value Of Alumni Networks: Evidence From The Mutual Fund Industry In China

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We study word-of-mouth effects on institutional investors through the interaction channel of alumni networks in China. After controlling for organization-based and location-based interpersonal connections, we find that mutual fund managers who graduated from the same college/university have more common stock holdings and are more likely to buy or sell the same stocks contemporaneously. As a result, alumni managers exhibit a higher correlation of fund returns. However, the influence of alumni relationship on mutual fund investments becomes weaker when more managers are connected within the network. We also find a positive and significant relation between alumni connection and fund performance. Our findings suggest that information dissemination among connected fund managers could be one of the driving forces for mutual fund herding behavior and that a portfolio of funds whose managers are educationally connected could be highly exposed to certain stocks and risks.

Author(s): Leng Ling, Quanxi Liang, Haijian Zeng

Presenters
LL

Leng Ling

Professor of Finance, Georgia College & State University


Wednesday October 3, 2018 4:45pm - 5:45pm
Michigan 1C

Attendees (1)