Journal
REVIEW OF FINANCIAL STUDIES
Volume 22, Issue 3, Pages 1213-1245Publisher
OXFORD UNIV PRESS INC
DOI: 10.1093/rfs/hhn012
Keywords
D31; J26; J32
Categories
Ask authors/readers for more resources
I evaluate the effect of loyalty on individuals' portfolio choice using a unique dataset of retirement contributions. I exploit the statutory difference that, in 401(k) plans, stand-alone employees can invest directly in their division, while conglomerate employees must invest in the entire firm, including all unrelated divisions. Consistent with loyalty, employees of stand-alone firms invest 10 percentage points (75%) more in company stock than conglomerate employees. Support is also found using variation in loyalty between different groups of employees, across and within firms. The cost to employees of loyalty is large, amounting to nearly a 20% loss in retirement income.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available