The Small World of Investing: Board Connections and Mutual Fund Returns

被引:625
作者
Cohen, Lauren [1 ,2 ]
Frazzini, Andrea [2 ,3 ]
Malloy, Christopher [1 ]
机构
[1] Harvard Univ, Cambridge, MA 02138 USA
[2] Natl Bur Econ Res, Cambridge, MA 02138 USA
[3] Univ Chicago, Chicago, IL 60637 USA
关键词
D O I
10.1086/592415
中图分类号
F [经济];
学科分类号
02 ;
摘要
This paper uses social networks to identify information transfer in security markets. We focus on connections between mutual fund managers and corporate board members via shared education networks. We find that portfolio managers place larger bets on connected firms and perform significantly better on these holdings relative to their nonconnected holdings. A replicating portfolio of connected stocks outperforms nonconnected stocks by up to 7.8 percent per year. Returns are concentrated around corporate news announcements, consistent with portfolio managers gaining an informational advantage through the education networks. Our results suggest that social networks may be important mechanisms for information flow into asset prices.
引用
收藏
页码:951 / 979
页数:29
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