The small world of investing
Subtitle: board connections and mutual fund returns
By: Lauren Cohen, Andrea Frazzini, Christopher Malloy
Contributors: Frazzini, Andrea; National Bureau of Economic Research
Series: NBER working paper series -- working paper 13121; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13121.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] :
Description: "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 firms they are connected to through their network, and perform significantly better on these holdings relative to their non-connected holdings.  A replicating portfolio of connected stocks outperforms a replicating portfolio of non-connected stocks by up to 8.4% per year.  Returns are concentrated around corporate news announcements, consistent with mutual fund managers gaining an informational advantage through the education networks.  Our results suggest that social networks may be an important mechanism for information flow into asset prices"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 7/19/2007.

Includes bibliographical references.

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