Birth order and fund manager’s trading behavior: Role of sibling rivalry

Using rich data on familial background of US mutual fund managers, this paper sheds light on the formation of risk preferences by investigating birth order effects. Consistent with sensation-seeking behavior, we find that managers who are born later in the sibling hierarchy take more risks but perform worse relative to lower-birth-order managers. Later-born managers take more extreme style bets, hold more lottery stocks, churn their portfolios more, and engage in more civil and regulatory violations. These birth-order effects are more pronounced when parental resources are limited and age spacing is lower between siblings, suggesting sibling rivalry as a potential mechanism.

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Publication Details

Journal
Journal of Corporate Finance
Published
2025-08-08
DOI
https://doi.org/10.1016/j.jcorpfin.2025.102852
Primary Topic
Family Dynamics and Relationships
Type
article
Field-Weighted Citation Impact
0.00

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article

Birth order and fund manager’s trading behavior: Role of sibling rivalry

Alexander Cochardt, Vikas Agarwal, Vitaly Orlov
Journal of Corporate Finance
Family Dynamics and Relationships
article

Birth order and fund manager’s trading behavior: Role of sibling rivalry

Alexander Cochardt, Vikas Agarwal, Vitaly Orlov
article en

Abstract

Using rich data on familial background of US mutual fund managers, this paper sheds light on the formation of risk preferences by investigating birth order effects. Consistent with sensation-seeking behavior, we find that managers who are born later in the sibling hierarchy take more risks but perform worse relative to lower-birth-order managers. Later-born managers take more extreme style bets, hold more lottery stocks, churn their portfolios more, and engage in more civil and regulatory violations. These birth-order effects are more pronounced when parental resources are limited and age spacing is lower between siblings, suggesting sibling rivalry as a potential mechanism.

Journal of Corporate FinanceVol. 95
Georgia State University (US), University of St.Gallen (CH), Swiss Finance Institute (CH)
Universität St. Gallen
Gender equality
Openalex Percentile: Top 62%
Family Dynamics and Relationships
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