We investigate how luck, namely, changes in a firm’s performance beyond the CEO’s control, affects strategic risk-taking. Fusing upper echelons theory with insights from psychology and behavioral strategy research, we hypothesize that there is a positive association between luck and...

This paper investigates the reasons for the lack of long-term persistence in the investment performance of actively managed equity mutual funds. We document that the responses of investors, fund managers, and investment management companies to past performance affect future performance....