Fintech Platforms and Mutual Fund Distribution

We document a novel platform effect caused by the emergence of fintech platforms in the intermediation of financial products. In China, platform distributions of mutual funds emerged in 2012 and grew quickly into a formidable presence. Utilizing the staggered entrance of funds onto platforms, we find a marked increase of performance chasing driven by the centralized information flow unique to fintech platforms. This pattern is further confirmed using proprietary data from a top platform. Examining the platform impact on fund managers, we find that incentivized by the amplified performance chasing, fund managers increase risk-taking to enhance their probability of getting onto the top ranking. This paper was accepted by William Cong, finance. Funding: X. Lu acknowledges financial support from the National Natural Science Foundation of China [Grant 72003126]. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.01966 .