Foreign Talent and Hedge Funds

Research output: Conference PapersRGC 33 - Other conference paper

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Detail(s)

Original languageEnglish
Publication statusPresented - 25 Oct 2022

Conference

Title2022 Financial Management Association (FMA) Annual Meeting
LocationHyatt Regency Hotel
PlaceUnited States
CityAtlanta
Period19 - 22 October 2022

Abstract

We examine the value of skilled foreign labor for hedge funds by leveraging on two natural experiments. We find that hedge funds that secure more H-1B visas in random lotteries deliver higher alphas, Sharpe ratios, and information ratios. Moreover, an unexpected reduction in the H-1B quota undermined the performance of hedge funds that were dependent on H-1B workers. The superior performance of funds with high H-1B allocations can be attributed to highly-educated STEM majors operating systematic strategies. Notwithstanding the valuable skills that foreign workers possess, racial and ethnic homophily induces some fund managers to eschew foreign labor.

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Citation Format(s)

Foreign Talent and Hedge Funds. / Chen, Jun; Hshieh, Shenje; Teo, Melvyn et al.
2022. 2022 Financial Management Association (FMA) Annual Meeting, Atlanta, Georgia, United States.

Research output: Conference PapersRGC 33 - Other conference paper