Work experience and managerial performance & styles: evidence from Chinese mutual fund market

Huang, S 2015, Work experience and managerial performance & styles: evidence from Chinese mutual fund market, Doctor of Philosophy (PhD), Economics, Finance and Marketing, RMIT University.


Document type: Thesis
Collection: Theses

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Title Work experience and managerial performance & styles: evidence from Chinese mutual fund market
Author(s) Huang, S
Year 2015
Abstract Work experience is a key factor in hiring decision of managers. However, empirical evidence that early life experience matters is very limited. This thesis fills in the gap by examining how work experience affects managerial performance and managerial style in mutual funds. Using a sample of Chinese fund managers, we find performances and styles vary across managers of different career backgrounds. Notably, managers of research and especially government backgrounds show higher risk adjusted returns while taking on less systematic risk. Further analyses on holdings characteristics suggest that they possess information advantage through prior work experience. In contrast, managers with experience in other investments generate high raw returns largely by holding more systematic risk and chase momentum.

These effects persist even after controlling for both fund and time fixed effects. However, the strong market-timing ability is presented by all fund managers with these three backgrounds. Fund managers of banking backgrounds perform the worst, but they show high ability in attracting new money flow. Then we continue to prove that one explanation for information advantages to be obtained is manager’s political connection relation. We find managers with political background outperform others. And they also have strong stock-picking and market-timing abilities to manage their portfolio. Overall, we provide evidence that work experience matters for performance and management style.
Degree Doctor of Philosophy (PhD)
Institution RMIT University
School, Department or Centre Economics, Finance and Marketing
Keyword(s) Early Life Experience
Career Path
Political Connection
Information Advantage
Stock-picking Ability
Market-timing Ability
Chinese Mutual Fund Market
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Created: Mon, 09 Nov 2015, 07:40:28 EST by Denise Paciocco
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