City Size and Fund Performance

AFA 2007 Chicago Meetings Paper

Journal of Financial Economics, 2009, 92, 252-275

55 Pages Posted: 14 Mar 2006 Last revised: 23 Mar 2020

See all articles by Susan Kerr Christoffersen

Susan Kerr Christoffersen

University of Toronto - Rotman School of Management; Copenhagen Business School

Sergei Sarkissian

McGill University; University of Edinburgh

Date Written: December 1, 2005


The literature predicts that the average skill level and productivity are higher in larger cities. Prior studies use workers’ wage or education differentials to indirectly link city size and output. This article relates city size and productivity directly, using performance data of U.S. equity mutual funds. On average, funds in financial centers perform better than other funds in terms of both gross and risk-adjusted returns, but this difference is driven only by more experienced managers. Among funds in financial centers there is strong evidence of a positive relation between performance and manager experience in a given city, especially among New York funds. More importantly, we observe performance improvements of the same manager at the same fund in financial centers but not elsewhere. Our tests provide novel evidence of knowledge spillovers and learning in cities.

Keywords: Information spillovers, Labor market, Mutual funds, Performance evaluation

JEL Classification: G23, J24

Suggested Citation

Christoffersen, Susan E. and Sarkissian, Sergei, City Size and Fund Performance (December 1, 2005). AFA 2007 Chicago Meetings Paper, Journal of Financial Economics, 2009, 92, 252-275, Available at SSRN: or

Susan E. Christoffersen

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
416 946 5647 (Phone)
416 971 3048 (Fax)


Copenhagen Business School

Solbjerg Plads 3
Frederiksberg C, DK - 2000

Sergei Sarkissian (Contact Author)

McGill University ( email )

1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5
514-398-4876 (Phone)
514-398-3876 (Fax)


University of Edinburgh

29 Buccleuch Pl.
Edinburgh, Scotland EH8 9JS
United Kingdom

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