Skill, Luck, and the Multiproduct Firm: Evidence from Hedge Funds
Management Science, pp. 1963-1978, 2011.
We formalize the idea that when managers require external investment to expand, higher-skilled firms will be more likely to diversify in equilibrium, even though managers can exploit asymmetric information about their ability to raise capital from investors. We exploit the timing of new fund launches in the hedge fund industry to distingu...More
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