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

This paper investigates the role of birth order on managerial behavior using rich data on familial background of US mutual fund managers. We find that managers who are born later in the sibling hierarchy take on more investment risks relative to first-born managers. Later-born managers deviate more from their peers and their funds’ benchmarks, trade more actively, take extreme style bets, and report more civil or regulatory violations compared to lower-birth-order managers. Taken together, our findings suggest that birth order-induced risk-taking originates from sibling rivalry for limited parental resources during childhood, shapes trading behavior, and extends beyond portfolio management.