Promotion or Demotion? An Empirical Investigation of the Determinants of Top Mutual Fund Manager Change

We provide the ̄rst study of mutual fund management change that attempts to classify the reason for change. Our analysis of 307 manager changes separates promotions from demotions. In contrast to previous research that simply looks at changes, we ̄nd a richer set of variables that explain the probability of fund manager replacement. Indeed, our results suggest that a pooled regression that does not attempt to discern between promotion and demotion is misspeci ̄ed. ¤ The authors gratefully acknowledge valuable suggestions and comments from Anup Agrawal, Douglas Pearce and David Dickey. Send correspondence to: Campbell R. Harvey, Fuqua School of Business, Duke University, Durham, NC 27708. Phone: (919)-6607768, E-mail: [email protected] . An electronic version of the paper is downloadable at http://www.fuqua.duke.edu/»charvey/Research/Working Papers/W50 Promotion or demotion.pdf.