Managerial Multi-tasking, Team Diversity and Mutual Fund Performance

65 Pages Posted: 27 Feb 2021

See all articles by Jean Jinghan Chen

Jean Jinghan Chen

University of Southampton

Li Xie

Si Zhou

Shanghai University

Date Written: October 18, 2020

Abstract

This study examines the impact of multi-tasking teams on fund performance. We find that while managerial multi-tasking has a negative impact on fund performance, teamwork can mitigate the adverse effect associated with managerial multi-tasking, which is indicative of superior performance of funds managed by multi-tasking teams. More importantly, it is the characteristics of the multitasking team that contribute to these superior results, which can be attributed to network cognitive diversity, suggesting that extended networks, facilitated by indirectly-connected managers via local teammates, can largely enhance the scale of cognitive diversity, thus generating significant gains through information pooling and integration. In assessing possible mechanisms for the observed superior performance, we find evidence of improved decision-making induced by network cognitive diversity through both transmission and sharing of value-relevant information, and speedy information diffusion.

Keywords: Managerial multi-tasking, Team diversity, Fund Performance

JEL Classification: G10, G20, G30

Suggested Citation

Chen, Jean and Xie, Li and Zhou, Si, Managerial Multi-tasking, Team Diversity and Mutual Fund Performance (October 18, 2020). Journal of Corporate Finance, Vol. 65, 2020, Available at SSRN: https://ssrn.com/abstract=3757195

Jean Chen

University of Southampton ( email )

Southampton, SO17 1BJ
Great Britain

Si Zhou (Contact Author)

Shanghai University ( email )

Room 522, Building 1,
Shanghai University,
Shanghai, Shanghai 20044
China

No contact information is available for Li Xie

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