Identity, Diversity, and Team Performance: Evidence from U.S. Mutual Funds
60 Pages Posted: 31 Jan 2020 Last revised: 11 Feb 2021
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Identity, Diversity, and Team Performance: Evidence from U.S. Mutual Funds
Date Written: January 2020
Abstract
We examine team diversity and performance in the asset management industry. Focusing on political ideology as the source of both potential complementarities and conflict in a group, we find diverse teams perform better than 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.
JEL Classification: G11, G23, J33, J44, L22, L25, L84, M12, M52
Suggested Citation: Suggested Citation
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/
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Identity, Diversity, and Team Performance: Evidence from U.S. Mutual Funds
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