02/19/2016 Colloquium Series - Charles Trzcinka: “A Tangled Tale of Training and Talent: PhDs in Institutional Asset Management”

Performance of investment products managed by firms in which PhDs play a key role is superior to the performance of products managed by otherwise similar firms. This relation is not a result of endogenous matching between firms and PhDs. Performance is related to training (the field of study) because economics or finance PhDs outperform other PhDs. Performance is also related to talent because PhDs who published in top outlets outperform other PhDs. Field-specific training does not matter among the most talented PhDs because the performance gap between economics or finance PhDs and other PhDs completely disappears among published PhDs.