Abstract

http://ssrn.com/abstract=1291872
 
 

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Reputation Concerns and Slow-Moving Capital


Steven G. Malliaris


Yale University - International Center for Finance

Hongjun Yan


Rutgers, The State University of New Jersey - Rutgers Business School

March 18, 2015

AFA 2011 Denver Meetings Paper
Yale ICF Working Paper No. 08-26

Abstract:     
Our paper shows that fund managers' reputation concerns induce a preference over the skewness of strategy returns. This preference is non-monotonic in the manager's reputation level: While managers with average reputations prefer negatively skewed strategies, those with very high or very low reputations prefer the opposite. Our model also explains why only negatively skewed strategies tend to suffer from slow-moving capital: A subtle but natural consequence of adopting negatively skewed strategies is that after poor performance, managers' reputations recover slowly. In the meantime, they are unable to raise capital, leaving attractive opportunities unexploited.

Number of Pages in PDF File: 34

Keywords: Reputation, Slow-moving capital, Career concern

JEL Classification: G11, G23


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Date posted: October 30, 2008 ; Last revised: March 19, 2015

Suggested Citation

Malliaris, Steven G. and Yan, Hongjun, Reputation Concerns and Slow-Moving Capital (March 18, 2015). AFA 2011 Denver Meetings Paper; Yale ICF Working Paper No. 08-26. Available at SSRN: http://ssrn.com/abstract=1291872 or http://dx.doi.org/10.2139/ssrn.1291872

Contact Information

Steven G. Malliaris
Yale University - International Center for Finance ( email )
Box 208200
New Haven, CT 06520
United States
HOME PAGE: http://sites.google.com/site/stevenmalliaris/

Hongjun Yan (Contact Author)
Rutgers, The State University of New Jersey - Rutgers Business School ( email )
100 Rockafeller Rd
Piscataway, NJ 08854
United States
HOME PAGE: http://https://sites.google.com/site/hongjunyanhomepage/
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