Knowledge Spillovers in the Mutual Fund Industry Through Labor Mobility

44 Pages Posted: 12 Feb 2019 Last revised: 1 Mar 2019

See all articles by Gjergji Cici

Gjergji Cici

University of Kansas - School of Business

Alexander Kempf

University of Cologne - Department of Finance & Centre for Financial Research (CFR)

Claudia Peitzmeier

University of Cologne - Centre for Financial Research (CFR)

Date Written: February 27, 2019

Abstract

Firms’ competitive advantages are unsustainable when competitors hire their employees away to study and recreate those advantages. We document inter-firm knowledge spillovers through labor mobility in the mutual fund industry, which result in performance improvement at the recipient family. This effect intensifies when switching managers had better access to the organization processes at the originating family and frictions hampering knowledge absorption at the recipient family are weaker. Performance deterioration at the originating family, which intensifies when more money chases the newly-transferred knowledge, suggests erosion of its competitive advantage and wealth transfers across investors in the respective families.

Keywords: Organization Capital, Knowledge Spillovers, Mutual Funds, Learning-by-Hiring

JEL Classification: D86, G23 K12, K31, M5

Suggested Citation

Cici, Gjergji and Kempf, Alexander and Peitzmeier, Claudia, Knowledge Spillovers in the Mutual Fund Industry Through Labor Mobility (February 27, 2019). Available at SSRN: https://ssrn.com/abstract=3326464 or http://dx.doi.org/10.2139/ssrn.3326464

Gjergji Cici (Contact Author)

University of Kansas - School of Business ( email )

Capitol Federal Hall
1654 Naismith Drive
Lawrence, KS 66045
United States
785-864-3873 (Phone)

HOME PAGE: http://business.ku.edu/gjergji-cici

Alexander Kempf

University of Cologne - Department of Finance & Centre for Financial Research (CFR) ( email )

Cologne, 50923
Germany
+49 221 470 2714 (Phone)
+49 221 470 3992 (Fax)

Claudia Peitzmeier

University of Cologne - Centre for Financial Research (CFR) ( email )

Albertus-Magnus Platz
Cologne, 50923
Germany

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