Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/181501
Authors: 
Jaspersen, Stefan
Limbach, Peter
Year of Publication: 
2018
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2018: Digitale Wirtschaft - Session: Corporate Finance C13-V3
Abstract: 
This study provides evidence that investors’ demographic similarity to CEOs affects their investment decisions. We find that mutual fund managers 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 CEOs have more impact on their firms. Results suggest that demographic similarity to CEOs facilitates informed trading, implying that investors’ information production incorporates firm management.
Subjects: 
CEO-investor similarity
familiarity bias
information advantages
investment decisions
mutual fund performance
JEL: 
G11
G23
J10
Document Type: 
Conference Paper

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