A Review on ESG Investing: Investors’ Expectations, Beliefs and Perceptions

E-print/Working paper (2023)

This study examines the recent literature on the expectations, beliefs and perceptions of investors who incorporate Environmental, Social, Governance (ESG) considerations in investment decisions with the ... [more ▼]

This study examines the recent literature on the expectations, beliefs and perceptions of investors who incorporate Environmental, Social, Governance (ESG) considerations in investment decisions with the aim to generate superior performance and also make a societal impact. Through the lens of equilibrium models of agents with heterogeneous tastes for ESG investments, green assets are expected to generate lower returns in the long run than their non- ESG counterparts. However, at the short run, ESG investment can outperform non-ESG investment through various channels. Empirically, results of ESG outperformance are mixed. We find consensus in the literature that some investors have ESG preference and that their actions can generate positive social impact. The shift towards more sustainable policies in firms is motivated by the increased market values and the lower cost of capital of green firms driven by investors’ choices. [less ▲]

Closed-End Funds and Discount Control Mechanisms

E-print/Working paper (2023)

The discount control mechanisms that closed-end funds often choose to adopt before IPO are supposedly implemented to narrow the difference between share price and net asset value. We find evidence that ... [more ▼]

The discount control mechanisms that closed-end funds often choose to adopt before IPO are supposedly implemented to narrow the difference between share price and net asset value. We find evidence that non-discretionary discount control mechanisms such as mandatory continuation votes serve as costly signals of information to reveal higher fund quality to investors. Rents of the skill signaled through the announcement of such policies accrue to managers rather than investors as differences in skill are revealed through growing assets under management rather than risk- adjusted performance. [less ▲]

Institutional Investors and Infrastructure Investing

in Review of Financial Studies (2021), 34(8)(3880-3934),

Strategic bias and popularity effect in the prediction of economic surprises*

in Journal of Forecasting (2020)

Gendered prices

in Review of Financial Studies (2020)

Reliability and relevance of fair values: private equity investments and investee fundamentals

in Review of Accounting Studies (2019), 24(4),

Signaling or Marketing? The Role of Discount Control Mechanisms

Scientific Conference (2019)

The Subsidy to Infrastructure as an Asset Class*

E-print/Working paper (2018)

Signaling or Marketing? The Role of Discount Control Mechanisms

E-print/Working paper (2018)

Blockchain, Fractional Ownership, and the Future of Creative Work

E-print/Working paper (2018)

While record-making prices at art auctions receive headline news coverage, artists typically do not receive any direct proceeds from those sales. Early-stage creative work in any field is perennially ... [more ▼]

While record-making prices at art auctions receive headline news coverage, artists typically do not receive any direct proceeds from those sales. Early-stage creative work in any field is perennially difficult to value, but the valuation, reward, and incentivization for artistic labor are particularly fraught. A core challenge in studying the real return on artists’ work is the extreme difficulty accessing data from when an artwork was first sold. Galleries keep private records that are difficult to access and to match to public auction results. This paper, for the first time, uses archivally sourced primary market records, for the artists Jasper Johns and Robert Rauschenberg. Although this approach restricts the size of the data set, this innovative method shows much more accurate returns on art than typical regression and hedonic models. We find that if Johns and Rauschenberg had retained 10% equity in their work when it was first sold, the returns to them when the work was resold at auction would have outperformed the US S&P 500 by between 2 and 986 times. The implication of this work opens up vast policy recommendations with regard to secondary art market sales, entrepreneurial strategies using blockchain technology, and implications about how we compensate creative work. [less ▲]