Does Working from Home Decrease Performance? Evidence from the Mutual Fund Industry

67 Pages Posted: 4 Sep 2020 Last revised: 15 Mar 2021

See all articles by Han Xiao

Han Xiao

Pennsylvania State University

Date Written: October 9, 2020

Abstract

This paper studies the effect of remote work on actively managed equity mutual fund returns and managerial skills. We use the staggered state-level stay-at-home orders in the U.S. as the difference-in-differences strategy. After working from home, fund daily net excess returns over market returns decrease by 90 basis points per day, corresponding to a 6-million-dollar economic loss per day than investing in market portfolios. The findings are relevant to decline in managerial skills, especially for funds managed by teams, in a family, or with multitasking arrangements. These results are robust under recent policy changes.

Keywords: Mutual Funds, COVID-19, Work from Home, Remote Work, Stay-at-home Order, Managerial Skill

JEL Classification: G23, G11, G38, J24

Suggested Citation

Xiao, Han, Does Working from Home Decrease Performance? Evidence from the Mutual Fund Industry (October 9, 2020). Available at SSRN: https://ssrn.com/abstract=3684957 or http://dx.doi.org/10.2139/ssrn.3684957

Han Xiao (Contact Author)

Pennsylvania State University ( email )

University Park, PA 16802
United States

HOME PAGE: http://han-xiao.weebly.com

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