Identity, Diversity, and Team Performance: Evidence from U.S. Mutual Funds

62 Pages Posted: 31 Jan 2020 Last revised: 22 Sep 2021

See all articles by Richard B. Evans

Richard B. Evans

University of Virginia - Darden School of Business

Melissa Porras Prado

Nova School of Business and Economics; Centre for Economic Policy Research (CEPR)

Antonino Emanuele Rizzo

Nova School of Business and Economics

Rafael Zambrana

University of Notre Dame - Mendoza College of Business

Multiple version iconThere are 2 versions of this paper

Date Written: January 2020

Abstract

We examine team diversity and performance in the asset management industry through the lens of identity. Focusing on political ideology as the relevant dimension of identity, we find that diverse teams outperform homogeneous teams. The mechanism involves both improved decision-making due to more diverse perspectives and increased monitoring by heterogeneous team members. The benefits of ideological diversity are undone when political polarization is higher, consistent with increased intra-team conflict. In examining why less diverse teams are prevalent in asset management, we find entrenched managers prefer homogeneous teams, and the local labor market supply of ideologically diverse managers is constrained.

Keywords:  Mutual fund, Campaign Contributions, Dispersion in Beliefs, diversity, Labor incentives, PACs, Polarization, Political Ideology, Teams

JEL Classification: G11, G23, J33, J44, L22, L25, L84, M12, M52

Suggested Citation

Evans, Richard B. and Porras Prado, Melissa and Rizzo, Antonino Emanuele and Zambrana, Rafael, Identity, Diversity, and Team Performance: Evidence from U.S. Mutual Funds (January 2020). CEPR Discussion Paper No. DP14305, Available at SSRN: https://ssrn.com/abstract=3526029

Richard B. Evans (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4030 (Phone)
434-243-7680 (Fax)

HOME PAGE: http://faculty.darden.virginia.edu/evansr/

Melissa Porras Prado

Nova School of Business and Economics ( email )

Campus de Carcavelos
Rua da Holanda 1
Carcavelos, 2775-405
Portugal

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Antonino Emanuele Rizzo

Nova School of Business and Economics ( email )

Campus de Carcavelos
Rua da Holanda, 1
Carcavelos, 2775-405
Portugal

Rafael Zambrana

University of Notre Dame - Mendoza College of Business ( email )

Notre Dame, IN 46556-5646
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
3
Abstract Views
738
PlumX Metrics