Research
Working Papers
Job Market Paper
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.
(With Virginia Gianinazzi, Victoire Girard and Melissa Prado)
This paper investigates the impact of Socially Responsible Investment (SRI) capital on the polluting practices of industrial Multinational Enterprises (MNEs) across all their facilities. We leverage the inverse relation between local pollution and high-frequency satellite-based measurements of local vegetation health through the normalized difference vegetation index (NDVI). Our empirical analysis encompasses a comprehensive dataset of 911 parent companies and 52,806 establishments worldwide. We estimate how the within-cell panel variation in NDVI relates to changes in SRI ownership and document an overall positive association between SRI ownership of a company and the NDVI around the company's establishments. However, this improvement is limited to facilities located within OECD countries. We observe no improvement between SRI and NDVI in non-OECD countries. These heterogeneous findings underscore the importance of considering the global nature of MNEs when evaluating sustainability effort.
Disaster as Catalyst: How Natural Disasters Shape Fund Managers' ESG Commitment
This paper explores whether the exposure of fund managers to negative events affects their investment behavior with regards to sustainability. I use climatic disasters as a shock to a manager’s attention to climate change. I find that managers located in counties neighboring major disaster areas significantly improve the ESG score of their overall holdings in periods following disasters by over 2.5%, and the E-component score by up to 6%. I propose social interactions with affected areas, beliefs about climate change, and increased attention to climate-related news as possible amplification mechanisms. Alternative explanations such as performance and divestment from disaster stocks do not explain the results.
Work in Progress
The ESG-Financial Performance Nexus: A Machine Learning Perspective
(With Catalina Stefanescu-Cuntze and Rodrigo Tavares)