Gender and Human Capital of Mutual Fund Managers and the Operating Efficiency

No study has explored the relationship among gender differences, human capital, and investment performance. This article is the first to answer the question, “Do female fund managers outperform male ones in fund performance given the same amount of human capital inputs?” Forty-two stock fund managers in Taiwan, 11 females and 31 males, were the subjects of this research. The research period for evaluating fund performance was the 24 months prior to the financial tsunami, from April 2006 to March 2008. Data envelopment analysis (DEA) was used to evaluate the fund managers’ operating efficiency ratings by handling multiple input and multiple output variables simultaneously. The input variables regarding the human capital of the fund managers were their fund management experiences, tenure in managing a specific fund, and their education levels, whereas the output variables were the returns and risks of fund performance. A statistical test was used to determine whether the difference between female DEA efficiency ratings and those of males was significant. Our research showed that the average operating efficiency of female fund * Associate professor, Department of Industrial and Business Management, Chang Gung University, E-mail: [email protected]. The author would like to thank the anonymous referees for their comments and suggestions, which have improved this article. Chang Gung Journal of Humanities and Social Sciences 8:1 (April 2015), 151-172 Chang Gung Journal of Humanities and Social Sciences 8:1 (2015) .152. managers was significantly higher than that of their male counterparts; or, equivalently, female managers outperform males in managing mutual funds, relative to the amount of human capital inputs. These findings are consistent with those of previous studies and may be attributed to the lower turnover rates of female managers, as shown in this study. However, facts showing that female fund managers in Taiwan operated larger-scale mutual funds while that fund size produced minimal or no negative impacts on fund performance differ from existing research results. The sample size is limited; however, this study has a greater proportion of females than that of most similar studies. In addition, in contrast to traditional regression models, this study’s DEA approach can elucidate future research to be performed in this area.