Abstract:
There are markedly different views on the rise of the sustainable investment movement. Some commentators argue that it is just window dressing. Others believe that it is having a real impact on corporate sustainability. This paper seeks to determine how changes in the responsible investor base affects corporate green capital expenditures. I identify responsible investors via the Climate Action 100+ initiative and approximate green capital expenditures with green debt instruments. The proportion of institutional investors with sustainable preferences is higher in Europe and Asia than in the United States. I exploit this observation and use the cross-listing of European and Asian headquartered firms in the United States as a negative responsible ownership shock. In a staggered difference-in-differences estimation, I find that cross-listing firms have a lower responsible investor share and are less likely to undertake green capital expenditures post cross-listing. I also document that responsible institutional investors engage more with management and are associated with stricter green governance. Together, my findings suggest that responsible institutional investors foster greater green capital expenditures by exerting influence on management.
with P. Bolton and M. Kacperczyk
Abstract:
We analyze green and brown R&D activity worldwide and its effects in reducing carbon emissions. Innovating companies with higher carbon emissions engage more in brown R&D and less in green R&D. Despite a steady rise in the share of green R&D, green innovation does not predict future reductions in carbon emissions of innovating firms, non-innovating firms in the same sector, firms in other sectors, and across countries, whether in the short term (one year after filing a green patent) or in the medium term (three or five years out). Rather, green innovation predicts higher indirect emissions in related industries.
Supplementary material: Patent Classification
with C. Custodio and D. Cvijanovic
Abstract:
This study investigates the impact of opioid abuse on real estate prices using variation in opioid prescription rates induced by the staggered passage of opioid-limiting legislation. Employing difference-in-differences, instrumental variables, and regression discontinuity design, we find that effective anti-opioid legislation results in an increase in county-level house prices due to a decrease in mortgage delinquencies and vacancy rates, and an increase in home improvement loans and migration inflows. Our results support a model of residential sorting that explains observed migration patterns following opioid-induced shocks to household income, highlighting the need for policy interventions to address the opioid epidemic's economic costs.
Media: IBKnowledge
2023: UBC Winter Finance Conference, SSE Harnessing Finance for Climate*, Carey Finance Conference PhD Session, Hoyt Institute*
2022: CEPR Advanced Forum for Financial Economics (CAFFE)*, UBC Sauder Business School*, University of Southern California*, Bocconi University*, Stanford Institute for Theoretical Economics*, ECB Conference on Money Markets*
2021: AREUEA 2021 National Conference, MIT CRE Seminar Series*, Baruch College*, Ted Rodgers School of Business Management - Ryerson*
2020: UZH Young Researcher Workshop on Climate Finance, University of Reading*
2019: GRASFI PhD Workshop; University of Siegen Conference on Risk Governance and Sustainability
*: conference presentation by co-author