Research

Working Papers

• Procuring Sustainability: The Impact of Green Government Contracts

This paper examines the impact of integrating sustainability criteria in federal procurement on firm behavior and environmental performance. Using comprehensive U.S. government contract and firm-level emissions data, I find that firms awarded green contracts significantly reduce their GHG emission intensity, though these reductions are not consistently greater than those from standard contracts. Despite the higher costs of green contracts, the evidence suggests that their environmental benefits may not always justify the cost premium. The effect on emissions is more pronounced for firms that are brown and financially constrained. I address endogeneity and selection biases by applying a matching technique, a Bartik instrument and exploiting an exogenous increase in public spending following census revisions. Green procurement also fosters innovation, particularly in green technologies, and generates positive but largely unilateral spillover effects in supply chains. Overall, these findings indicate that while government procurement can promote sustainability, the environmental benefits of green contracts may not justify their higher costs.

• Socially Responsible Investing and Multinationals’ Pollution: Evidence from Global Remote Sensing Data

(With Virginia Gianinazzi, Victoire Girard and Melissa Prado)

This paper examines the effect of Socially Responsible Investment (SRI) capital on the environmental footprint of industrial multinational enterprises (MNEs), measured uniformly across global operations. Using high-frequency satellite data on the normalized difference vegetation index (NDVI), we track changes in local environmental conditions around 52,806 facilities owned by 911 parent firms worldwide. Greater SRI ownership is associated with improved vegetation health, indicating a reduced environmental footprint. These gains are concentrated in OECD countries and strengthen with more engaged investors. In contrast, vegetation declines around non-OECD facilities of the same firms, particularly under high investor pressure, consistent with pollution being shifted abroad. Our findings show that institutional capital can shape corporate environmental behavior, but pressure alone has not curbed displacement strategies. Addressing cross-border externalities will be essential for global environmental progress.

• Disaster as Catalyst: How Natural Disasters Shape Fund Managers' ESG Commitment

This paper investigates how exposure to natural disasters shapes mutual fund managers’ ESG commitments. Using a difference-in-differences design, I show that managers in counties adjacent to disaster areas increase portfolio ESG scores by 1.5% (3% for environmental scores) in subsequent quarters. These effects are driven by divestment from low-ESG stocks rather than acquisitions of high-ESG assets. Social connectedness to affected areas, prior climate change beliefs, and media attention amplify the response. Robustness tests rule out performance-driven or divestment explanations. By linking salience theory to sustainable investing, this study reveals how personal and social experiences reshape capital allocation.

• Foreign Investors and Firms' Accountability Arbitrage

This paper examines how foreign institutional investors, constrained by information asymmetries and monitoring costs, shape firms’ social policies through their reliance on standardized ESG metrics. Analyzing novel data from 12,351 firms across 58 countries, this paper documents a pattern of ‘accountability arbitrage’: firms strengthen visible social metrics, such as diversity, while underinvesting in less observable areas, including worker safety, customer responsibility, and human rights. This strategic reallocation has tangible realworld consequences, affecting the incidence of social controversies and demonstrating that the observed effects extend beyond mere reporting artifacts. This creates a ‘visibility gap’, leading to uneven social outcomes. The gap widens when investors are distracted and narrows in countries with strong rule of law. Causality is established using capital proximity and MSCI index inclusion as instruments. These findings underscore the nuanced impact of foreign capital on the social pillar of ESG, which remains an under-researched area.