Title

Unobserved ties between corporate executives and mutual fund managers

Document Type

Article

Publication Date

12-1-2019

Publication Title

Accounting and Finance

Abstract

After corporate executives relocate from origin firms to destination firms, only 3.6 percent of mutual fund managers follow the departing executives: they divest from origin firms while initiating investments in destination firms. This phenomenon is more pronounced for those funds that earned superior returns from investments in the origin firms, and that demand more information regarding the destination firms. Further, comigration funds’ holding changes in destination firms more accurately predict cumulative abnormal returns around earnings announcements than do their investments in other stocks and non-comigration funds’ new investments. Hiring the migrating executives does not improve the destination firms’ operating performance.

Volume Number

59

Issue Number

5

First Page

2961

Comments

© 2019 Accounting and Finance Association of Australia and New Zealand

State

published

Last Page

2991

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