Network centrality and delegated investment performance

Publikation: Bidrag til tidsskrift/Konferencebidrag i tidsskrift /Bidrag til avisTidsskriftartikelForskningpeer review

  • A.G. Rossi
  • ,
  • D. Blake
  • ,
  • Allan Timmermann
  • I. Tonks, University of Bath School of Management
  • ,
  • R. Wermers, City University London

We show a positive relation between network centrality and risk-adjusted performance in a delegated investment management setting. More connected managers take more portfolio risk and receive higher investor flows, consistent with these managers improving their ability to exploit investment opportunities through their network connections. Greater network connections are shown to be particularly important in reducing the diseconomies of scale for large managers who are well connected. We also use the exogenous merger of two investment consultants, which creates a sudden change in the network connections of the managers they oversee, to provide evidence that a greater number of connections translates into better portfolio performance.

OriginalsprogEngelsk
TidsskriftJournal of Financial Economics
Vol/bind128
Nummer1
Sider (fra-til)183-206
Antal sider24
ISSN0304-405X
DOI
StatusUdgivet - 2018

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