Sustainable Finance

Sustainable Finance

**Under construction**

Sustainable Finance

'A nascent literature in finance provides theoretical and empirical evidence that institutional investors should consider climate risks in their investment decisions. Notably, recent asset pricing models highlight the importance of climate risks as a long-run risk factor (Bansal, Ochoa, and Kiku 2017) and the importance of carbon risks and environmental pollution in the cross-section of stock returns (Bolton and Kacperczyk 2019; Hsu, Li, and Tsou 2019).

Growing evidence indicates that climate risks may be mispriced in financial markets (Hong, Li, and Xu 2019; Daniel, Litterman, and Wagner 2017; Kumar, Xin, and Zhang 2019). At the firm level, Addoum, Ng, and Ortiz‐Bobea (2019) show that extreme temperatures can adversely affect corporate earnings, Pankrantz, Bauer, and Derwall (2019) provide evidence that increasing exposure to high temperatures reduces revenues and operating income, and Kruttli, Tran, and Watugala (2019) show that extreme weather is reflected in stock and option market prices.

Moreover, evidence suggests significant changes for firms after the Paris Agreement. For example, greater climate risk leads to lower firm leverage with firms decreasing their demand for debt and lenders reducing their lending to firms with the greatest risk (Ginglinger and Moreau 2019); banks began to price carbon risk into their loans after the Paris Agreement (Delis, de Greiff, and Ongena 2019); and credit ratings and yield spreads changed for polluting firms (Seltzer, Starks, and Zhu 2019). In addition, studies conclude that firms can lower their cost of capital and increase value by improving their environmental policies (Sharfman and Fernando 2008; Chava 2014; El Ghoul et al. 2018).

On the investor side, archival studies show that better environmental policies are related to lower downside and overall portfolio risk (Hoepner et al. 2019; Gibson Brandon and Krueger 2018). In a similar spirit, Jagannathan, Ravikumar, and Sammon (2019) argue that investors can reduce portfolio risk by incorporating climate criteria into their investment processes and Ramelli et al. (2019) provide evidence that investors react to political events related to firms’ climate strategies. Despite the growing empirical evidence that investors should take climate considerations into account, integrating climate risks into the investment process can prove to be challenging, with investment tools and best practices not yet well established. For example, many market participants, including institutional investors, find climate risks difficult to price and hedge, possibly because of their systematic nature, a lack of disclosure by portfolio firms, and challenges in finding suitable hedging instruments'. 

Krueger, P., Z. Sautner, and L. T. Starks. (2019). The Importance of Climate Risks for Institutional Investors . Review of Financial Studies, forthcoming.

Climate-related Financial Disclosures

In 2017, the TCFD published ambitious recommendations on non-financial disclosures which have since been well received by groups of investors, regulators and companies. Following this publication, ClimateAction100, an investor initiative to ensure that the world’s largest corporate greenhouse gas emitters take necessary action on climate change, was established. A growing number of companies are now committed to TCFD and are taking steps to incorporate the new standard. The TCFD recommendations have also found support from governments, including Belgium, France, Canada, Sweden and the United Kingdom.

Green Bonds and Capital Markets

Climate change poses new challenges and risks to central banks, regulators and supervisors which can be addressed within central banks’ financial stability mandate. 'However, integrating climate-related risk analysis into financial stability monitoring is particularly challenging because of the radical uncertainty associated with a physical, social and economic phenomenon that is constantly changing and involves complex dynamics and chain reactions. Traditional backward-looking risk assessments and existing climate-economic models cannot anticipate accurately enough the form that climate-related risks will take. These include what we call “green swan” risks: potentially extremely financially disruptive events that could be behind the next systemic financial crisis. Central banks have a role to play in avoiding such an outcome, including by seeking to improve their understanding of climate-related risks through the development of forward-looking scenario-based analysis. But central banks alone cannot mitigate climate change. This complex collective action problem requires coordinating actions among many players including governments, the private sector, civil society and the international community. Central banks can therefore have an additional role to play in helping coordinate the measures to fight climate change. Those include climate mitigation policies such as carbon pricing, the integration of sustainability into financial practices and accounting frameworks, the search for appropriate policy mixes, and the development of new financial mechanisms at the international level. All these actions will be complex to coordinate and could have significant redistributive consequences that should be adequately handled, yet they are essential to preserve long-term financial (and price) stability in the age of climate change'. The Green Swan: Central Banking and Financial Stability in the Age of Climate Change. Patrick BOLTON - Morgan DESPRES - Luiz Awazu PEREIRA DA SILVA Frédéric SAMAMA - Romain SVARTZMAN (January 2020)

Private Equity


Directors' Duties

This is an interesting area for corporate governance scholars on what is an emerging topic. The link between investment horizons and sustainability is ownership and control, that is transposed into board composition and action. It matters, for example, if the company is open to shareholder influence from what type of shareholder. The main short run pressure today comes from hedge fund activists, yet hedge fund activists often use the same channels of influence as ESG oriented investors. There is also a link with FinTech, noting that the LTSE (the Long Term Stock Exchange) is a new listing segment project and loyalty shares with tenure voting are part of the proposed listing rules. This has become possible through blockchain technology.



ECGI will continue to track the progress of research in this area and related developments. Additional resources will be made available through these pages.

Queries and project funding proposals should be directed to  




The Green Swan: Central Banking and Financial Stability in the Age of Climate Change. Patrick BOLTON - Morgan DESPRES - Luiz Awazu PEREIRA DA SILVA Frédéric SAMAMA - Romain SVARTZMAN (January 2020)

Principles of Sustainable Finance. Dirk Schoenmaker and Willem Schramade (OUP, 2018)

Academic Papers:

Akey, P. and I. Appel. 2018. The limits of limited liability: Evidence from industrial pollution. Working Paper, University of Toronto.

Amir Amel-Zadeh and George Serafeim, “Why and How Investors Use ESG Information: Evidence from a Global Survey” (2018) Fin Anal J 74:87.

Andersson, M., P. Bolton, and F. Samama. 2016a. Hedging climate risk. Financial Analysts Journal 72:13– 32.

Muhammad Atif |Mohammed Hossain |Md. Samsul Alam |Marc Goergen Does Board Gender Diversity Affect Renewable Energy Consumption?

Malcolm P. Baker, Daniel Bergstresser, George Serafeim, Jeffrey Wurgler, “Financing the Response to Climate Change: The Pricing and Ownership of U.S. Green Bonds” (2018) available at

Baldauf, M., L. Garlappi, and C. Yannelis. Forthcoming. Does climate change affect real estate prices? Only if you believe in it. Review of Financial Studies.

Christina E. Bannier, Yannik Bofinger, Bjorn Rock, “Doing Safe by Doing Good: ESG Investing and Corporate Social Responsibility in the U.S. and Europe,” available at

Bansal, R., M. Ochoa, and D. Kiku. 2017. Climate change and growth risks. Working Paper, Duke University.

Tamas Barko |Martijn Cremers | Luc Renneboog Shareholder Engagement on Environmental, Social, and Governance Performance

Barnett, M., W. Brock, and L. Hansen. 2019. Pricing uncertainty induced by climate change. Working Paper, RFS Climate Finance Initiative.

Bartram, S., K. Hou and S. Kim. 2019. Real effects of climate policy: Financial constraints and spillovers. Working Paper, Warwick Business School.

Ben-David, Itzhak and Jang, Yeejin and Kleimeier, Stefanie and Viehs, Michael, Exporting Pollution: Where Do Multinational Firms Emit CO2? (October 30, 2019). Fisher College of Business Working Paper No. 2018-03-20. Available at SSRN:

Berg, F., J. F. Kölbel, and R. Rigobon. (2019). Aggregate Confusion: The Divergence of ESG Ratings. Working Paper, MIT.

Bernstein, A., M. Gustafson, and R. Lewis. 2019. Disaster on the horizon: The price effect of sea level rise. Journal of Financial Economics 134:253–72.

Bessembinder, H. 2017. Fossil fuel divestment and its potential impacts on students, faculty and other university and pension stakeholders. Working Paper, University of Utah.

Bolton, P. and M. Kacperczyk. 2019. Do investors care about carbon risk? Working Paper, Columbia University.

Paul Brest |Ronald Gilson | Mark A. Wolfson How Investors Can (and Can't) Create Social Value

Aaron K. Chatterji, Michael W. Toffel, “How Firms Respond to Being Rated” (2010) Strat Manage J 31:917

Chen, T., D. Hui, and C. Lin. (2019). Institutional shareholders and corporate social responsibility. Journal of Financial Economics, forthcoming.

Choi, D, Z. Gao, and W. Jiang. 2019. Attention to global warming. Working Paper, RFS Climate Finance Initiative.

Hans Christensen | Luzi Hail |Christian Leuz Adoption of CSR and Sustainability Reporting Standards: Economic Analysis and Review

Christensen, D., Serafeim, G. and Sikochi, A.: 2019, Why is Corporate Virtue in the Eye of the Beholder? The Case of ESG Ratings. Working Paper.

Rui Dai |Hao Liang | Lilian Ng Socially Responsible Corporate Customers

Daniel, K., R. Litterman, and G. Wagner. 2017. Applying asset pricing theory to calibrate the price of climate risk. Working Paper, Columbia Business School.

Davies, S. W., and E. D. Van Wesep. (2018). The unintended consequences of divestment. Journal of Financial Economics, 128, 558–575.

Delis, M, K. de Greiff, and S. Ongena. 2019. Being stranded with fossil fuel reserves? Climate policy risk and the pricing of bank loans. Working Paper, Montpellier Business School.

Dietz, S., A. Bowen, C. Dixon, and P. Gladwell. 2016. ‘Climate value at risk’ of global financial assets. Nature Climate Change 6:676–79.

Doyle, T. M.: 2018, Ratings that don’t rate – the subjective view of ESG rating agencies, Technical report, ACCF American Council for Capital Formation. URL:

Dyck, A., K. V. Lins, L. Roth, and H. F. Wagner. (2019). Do institutional investors drive corporate social responsibility? International evidence. Journal of Financial Economics, 131, 693–714.

Eccles, R. G., Lee, L.-E. and Stroehle, J. C.: 2019, The social origins of ESG? An analysis of Innovest and KLD. Working Paper.

Eccles, R. G. and Stroehle, J. C.: 2018, Exploring social origins in the construction of ESG measures. Working Paper.

El Ghoul, S., O. Guedhami, H. Kim, and K. Park. 2018. Corporate environmental responsibility and the cost of capital: International evidence. Journal of Business Ethics 149:335–61.

Engle, R., S. Giglio, B. Kelly, H. Lee, and J. Stroebel. Forthcoming. Hedging climate change news. Review of Financial Studies.

Fernando, C., M. Sharfman, and V. Uysal. 2017. Corporate environmental policy and shareholder value: Following the smart money. Journal of Financial and Quantitative Analysis 52:2023–51.

Jill E. Fisch, “Making Sustainability Disclosure Sustainable” (2019), Geo L J 107:923

Flammer, C. 2018. Corporate green bonds. Working Paper, Boston University.

Gunnar Friede, Timo Busch, Alexander Bassen, “ESG and Financial Performance: Aggregated Evidence from More than 2000 Empirical Publications” (2015) J Sustain Fin 5:210.

Nickolay Gantchev | Mariassunta Giannetti | Rachel Li Does Money Talk? Market Discipline through Selloffs and Boycotts

Gibson, R., Glossner, S., Kruger, P., Matos, P. and Steffen, T.: 2019, Responsible institutional investing around the world. University of Geneva and University of Virginia.

Rajna Gibson Brandon |Philipp Krüger The Sustainability Footprint of Institutional Investors

Rajna Gibson Brandon |Philipp Krüger |Nadine Riand |Peter Steffen Schmidt ESG Rating Disagreement and Stock Returns

Giglio, S., M. Maggiori, K. Rao, J. Stroebel, and A. Weber. 2018. Climate change and long-run discount rates: Evidence from real estate. Working Paper, Yale University.

Ginglinger, E., and Q. Moreau. 2019. Climate risk and capital structure. Working Paper, Université ParisDauphine.

Samuel M. Hartzmark |Abigail B. Sussman Do Investors Value Sustainability? A Natural Experiment Examining Ranking and Fund Flows

Heinkel, R., A. Kraus, and J. Zechner. (2001). The effect of green investment on corporate behavior. Journal of Financial and Quantitative Analysis 36, 431–449.

Hjort, I. 2016. Potential climate risks in financial markets: A literature overview. Working Paper, University of Oslo.

Hoepner, A. G., Oikonomou, I., Sautner, Z., Starks, L. T. and Zhou, X.: 2019, ESG shareholder engagement and downside risk. Working Paper

Hong, H., F. Li, and J. Xu. 2019. Climate risks and market efficiency. Journal of Econometrics 208:265–81

Hsu, P., K. Li, and C. Tsou. 2019. The pollution premium. Working Paper, University of Hong Kong.

Ilhan, E., P. Krueger, Z. Sautner, and L. Starks. 2019. Institutional investors’ views and preferences on climate risk disclosure. Working Paper, Frankfurt School of Finance & Management.

Ilhan, E., Z. Sautner, and G. Vilkov. 2019. Carbon tail risk. Working Paper, Frankfurt School of Finance & Management.

Jagannathan, R., A. Ravikumar, and M. Sammon. Forthcoming. Environmental, social and governance criteria: Why investors are paying attention. Journal of Investment Management.

Andreas Karpf and Antoine Mandel, “Does it Pay to Be Green?” (2017) available at

Mozaffar Khan, George Serafeim, Aaron Yoon, “Corporate Sustainability: First Evidence on Materality” (2016) 91 The Accounting Review 1697

Krueger, P., Z. Sautner, and L. T. Starks. (2019). The Importance of Climate Risks for Institutional Investors . Review of Financial Studies, forthcoming.

Kumar, A., W. Xin, and C. Zhang. 2019. Climate sensitivity and predictable returns. Working Paper, University of Miami.

Kumar, N., A. Shashwat, and R. Wermers. 2019. Do fund managers misestimate climatic disaster risk? Working Paper, RFS Climate Finance Initiative.

Anne Lafarre | Christoph Van Der Elst Shareholder Sustainability Activism in the Netherlands

Hao Liang |Luc Renneboog The Global Sustainability Footprint of Sovereign Wealth Funds

Florencio Lopez-de-Silanes |Joseph McCahery |Paul C. Pudschedl ESG Performance and Disclosure: A Cross-Country Analysis

Florencio Lopez-de-Silanes, Joseph A. Mc Cahery, and Paul C. Pudschedl, “Institutional Investors and ESG Preferences,” (2019) Working paper.

Pedro Matos |Hao Liang |Po-Hsuan Hsu Leviathan Inc. and Corporate Environmental Engagement

Murfin, J., and M. Spiegel. Forthcoming. Is the risk of sea level rise capitalized in residential real estate? Review of Financial Studies.

Painter, M. 2019. An inconvenient cost: The effects of climate change on municipal bonds. Journal of Financial Economics. Advance Access published June 15, 2019, 10.1016/j.jfineco.2019.06.006.

Pankratz, N., R. Bauer, and J. Derwall. 2019. Climate change, firm performance and investor surprises. Working Paper, UCLA.

Pedersen, L. H., S. Fitzgibbons, and Pomorski, L., (2019) Responsible Investing: The ESG-Efficient Frontier. Working Paper, New York University.

Rameli, S., A. Wagner, R. Zeckhauser, and A. Ziegler. 2019. Investor rewards to climate responsibility: Evidence from the 2016 climate policy shock. Research Paper, Swiss Finance Institute.

Riedl, A., and P. Smeets. 2017. Why do investors hold socially responsible mutual funds? Journal of Finance 72:2505–50.

Seltzer, L., L. Starks, and Q. Zhu. 2019. Climate regulatory risk and corporate bonds. Working Paper, University of Texas at Austin.

Michael Shafer and Edward Szado, “Environmental, Social, and Governance Practices and Perceived Tail Risk” (2018) available at;

Sharfman, M., and C. Fernando. 2008. Environmental risk management and the cost of capital, Strategic Management Journal 29:569–92.

Matthew W. Sherwood and Julia Pollard, “The Risk-Adjusted Return Potential of Integrating ESG Strategies into Emerging Market Equities” (2017) J Sustain Fin 8:26;

Shive, S., and M. Forster. Forthcoming. Corporate governance and pollution externalities of public and private firms. Review of Financial Studies.

Starks, L. T., P. Venkat, and Q. Zhu. (2017). Corporate ESG Profiles and Investor Horizons. Working Paper, University of Texas at Austin.

Tang, D., and Y. Zhang. Forthcoming. Do shareholders benefit from green bonds? Journal of Corporate Finance.

Zerbib, O. 2019. The effect of pro-environmental preferences on bond prices: Evidence from green bonds. Journal of Banking and Finance 98:39–60.


Policy papers, reports, viewpoints and speeches:

SEC “Commission Guidance Regarding Disclosure Related to Climate Change” (2010),

EU Directive 2014/95, of the European Parliament and of the Council of Oct. 22, 2014, Article 1, 2014 O.J. (L 330/1) 1, 5 (EU)

GSIA Global Sustainable Investment Alliance: 2016, Global sustainable investment review 2016,

Principles for Responsible Investing (PRI), “French Energy Transition Law: Global investor briefing on Article 173” (22 April 2016),

Forum pour l’Investissement Responsable (FIR), “ Article 173- VI: Understanding the French regulation on investor climate reporting,” (October 2016),

Blackrock. 2016. Adapting portfolios to climate change Implications and strategies for all investors. Blackrock Investment Institute. September 2016.

Task force for Climate-related Finance Disclosures, TCFD. 2017. Final report―Recommendations of the task force on climate-related financial disclosures.

OECD, “Investment Governance and the Integration of Environmental, Social and Governance Factors” (2017), available at

Japan Financial Services Agency, “Finalization of Japan’s Stewardship Code (Revised version),” (May 2017) at, and related materials at

OECD. 2017. Investing in climate, investing in growth. Report, OECD, Paris, France.

PRI Principles for Responsible Investment: 2018, Annual report 2018, Principles for Responsible Investing (PRI),

USSIF Forum for Sustainable and Responsible Investment: 2018, Report on US sustainable, responsible and impact investing trends 2018, Washington DC.

SEC “Request for rulemaking on environmental, social, and governance (ESG) disclosure” (2018),

Australian Council of Superannuation Investors, (17 May 2018), “Australian Asset Owner Stewardship code,”

UK Financial Reporting Council (FRC), “UK Stewardship Code of 2020” (24 October 2019), available at The revised UK Stewardship Code allows the FCA to investigate concerns that asset managers are ignoring trustee ECG policies and voting instructions.

US House Committee on Financial Services, “Building a Sustainable and Competitive Economy: An Examination of Proposals to Improve Environmental, Social and Governance Disclosures” (10 July 2019),

UK FRC, “UK Stewardship Code of 2020” (24 October 2019), available at

Australian Council of Superannuation Investors, (8 May 2019), “ESG integration and stronger stewardship support long-term value creation,”

EFRAG: European Reporting Lab - Project Task Force On Climate-Related Reporting. How To Improve Climate-Related Reporting: A Summary Of Good Practices From Europe and Beyond:

The European Securities and Markets Authority (ESMA) releases a sustainable finance strategy that sets key priorities, including transparency obligations, risk analysis on green bonds, ESG investing, convergence of national supervisory practices on ESG factors, taxonomy, and supervision. The sustainable finance strategy aims to support the growth of sustainable finance while contributing to investor protection.

Blog posts / other: 

SASB, Standards Overview, available at

Rohei Nakagawa, “Shareholding Characteristics and Imperfect Coverage of the Stewardship Code in Japan” (2017), Japan Forum 29:339-353.

Mackintosh, J.: 2018, Is Tesla or Exxon more sustainable? It depends whom you ask, Wall Street Journal . URL:

Wigglesworth, R.: 2018, Rating agencies using green criteria suffer from ’inherent biases’, Financial Times .

FT, “ESG Money Market Funds Grow 15% in First Half of 2019” (14 July 2019), available at

Morningstar, “The Evolving Approaches to Regulating ESG Investing” (2019)

FT, “Pension Trustees Test UK’s Revamped Stewardship Code” (4 November 2019) available at

IPE, “FRC Reworks Stewardship Definition in More Demanding Code” (24 October 2019), available at

P Temple-West, “US Congress rejects European-style ESG reporting standards,” Financial Times (12 July 2019)

A bill, H.R. 4329, the ESG Simplification Act of 2019, was passed by the House Financial Services Committee on 20 September 2019, but is unlikely to be passed by the U.S. House of Representatives,

Sustainalytics Ratings and Research, “Understanding Your Company’s ESG Ratings” (May 2019) available at

Nina Röhrbein, “The Swiss ESG paradox,” IPE magazine, June 2012, available at

Carbon Tracker. 2015. The $2 trillion stranded assets danger zone: How fossil fuel firms risk destroying investor returns.

Carney, M. 2015. Breaking the tragedy of the horizon-climate change and financial stability. Speech, September 29. Bank of England, Lloyds of London.

Faust, D. G. 2013. Fossil fuel divestment statement. Letter, October 3.

Hirtenstein, A. 2018. Climate change could make your basement uninsurable in the next decade. Bloomberg, January 25.

Kruttli, M., B. Roth Tran, and S. Watugala. 2019. Pricing Poseidon: Extreme weather uncertainty and firm return dynamics. Working Paper, Board of Governors of Federal Reserve System.

Lemos Stein, M. 2018. More shareholders proposals spotlight climate change. Wall Street Journal, February 8.

Mooney, A. Growing number of pension funds divest from fossil fuels. Financial Times, April 28.

Nicholls, M. 2015. Special report ESG: Carbon risk, a changing climate. IPE Magazine, February.‐reports/esg‐carbon‐risk/special‐report‐esg‐carbon‐risk‐a‐changing‐ climate/10006437.article

Olson, B. 2017. Exxon shareholders pressure company on climate risks. Wall Street Journal, May 31.

European Commission Conference on Promoting Sustainable Finance (8-9 January 2019: (including websteams)


European Commission Background (available here):

In 2014 the EU agreed Directive 2014/95/EU (the Non-Financial Reporting Directive or NFRD), an amendment to Directive 2013/34/EU (the Accounting Directive). The NFRD requires certain companies to report information regarding the environment, social and employee issues, human rights, and bribery and corruption, on an annual basis. The NFRD applies to large listed companies, banks and insurance companies with more than 500 employees. Companies under the scope of the NFRD had to meet these reporting requirements for the first time in 2018, for information covering financial year 2017. In 2017, as required by the NFRD, the Commission published non-binding guidelines to help companies report relevant, useful and comparable information. In June 2019 the Commission published additional guidelines on how to report climate-related information, which integrate the recommendations of the FSB Task Force on Climate-related Financial Disclosures (TCFD). The non-financial information needs of the investment community are increasing very substantially and very quickly. The demand for better information from investee companies is driven partly by investors needing to better understand financial risks resulting from the sustainability crises we face, and partly by the growth in financial products that actively seek to address environmental and social problems. According to the preliminary conclusions of a Fitness Check that the services of the Commission are finalising (Fitness Check on the overall EU framework for public reporting by companies), the NFRD does not adequately respond to these needs. As announced in the Commission’s Communication on the European Green Deal, it is important that companies and financial institutions improve their disclosure of non-financial information so that investors are better informed about the sustainability of their investments. To this end, the Commission committed to review the Non-Financial Reporting Directive in 2020 as part of the strategy to strengthen the foundations for sustainable investment. This also reflects global trends, with a wide variety of different organisations and stakeholders calling for a consideration of a new regulatory approach to non-financial reporting. In the European Green Deal the Commission also committed to support businesses and other stakeholders in developing standardised natural capital accounting practices within the EU and internationally. In its resolution on sustainable finance in May 2018, the European Parliament called for the further development of reporting requirements in the framework of the NFRD. In December 2019, in its conclusions on the Capital Markets Union, the Council stressed the importance of reliable, comparable and relevant information on sustainability risks, opportunities and impacts, and called on the Commission to consider the development of a European non-financial reporting standard. Finally, some new EU legislation, including the regulation on sustainability disclosures in the financial services sector, the regulation on a classification system (taxonomy) of sustainable economic activities and the amendment to the benchmark regulation regarding climate-related benchmarks, can only fully meet their objectives if more and better non-financial information is available from investee companies. The taxonomy Ref. Ares(2020)580716 - 30/01/2020 2 regulation will require companies under the scope of the NFRD to disclose certain indicators of the proportion of their activities that are classified as sustainable according to the taxonomy.

The European Commission published an action plan on financing sustainable growth in March 2018 (see full text here) which has 3 main objectives:

  • reorient capital flows towards sustainable investment, in order to achieve sustainable and inclusive growth
  • manage financial risks stemming from climate change, environmental degradation and social issues
  • foster transparency and long-termism in financial and economic activity





The relationship between public listing, context, multi-nationality and internal CSR

Are MNEs more socially responsible, and where is this more likely to occur? Are rms less responsible in emerging or transitional economies, and what impact does the dominant national corporate governance regime have? We explore the association...Read more

Salim Chahine
Marc Goergen
10 December 2017

Loyalty Shares with Tenure Voting - Does the Default Rule Matter? Evidence from the Loi Florange Experiment

The contractual theory of the firm predicts that companies adopt charters that maximise firm value, regardless of the default rule. We test this proposition around an exogenous switch of the default from one share-one vote to tenure voting...Read more

Marco Becht
Anete Pajuste
16 April 2018