An Empirical Examination on the Effect of Fund Managers Turnover on Fund Managers’ Investment Behavior

摘要

The fund industry in China has characteristic of a frequent turnover among fund managers which lead to the fund managers paying more attention to negative reputation than positive reputation. Analyzed by binary choice model, the result shows that the possibility of facing negative reputation is larger for those fund managers with less working experience who take on more adventurous strategy. With the hope of reducing the probability of negative reputation, these managers mentioned above will follow those managers with rich experience. Therefore, the “herd behavior” emerges.