Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/162720
Authors: 
Jaspersen, Stefan
Limbach, Peter
Year of Publication: 
2017
Series/Report no.: 
CFR Working Paper 17-02
Abstract: 
We study whether investors' demographic similarity to CEOs affects their investment decisions. Mutual fund managers are found to overweight firms led by CEOs who resemble them in terms of age, ethnicity and gender. This finding is robust to excluding educational and local ties and is supported by variation in similarity caused by CEO departures. Investing in firms run by similar CEOs, on average, is associated with superior performance and is more pronounced when uncertainty is higher. Results suggest that demographic similarity to CEOs facilitates informed trading. They further suggest that CEOs matter to investors.
Subjects: 
CEO-investor similarity
familiarity bias
information advantages
investment decisions
mutual fund performance
JEL: 
G11
G23
J10
Document Type: 
Working Paper

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