Institutional investors' role in the energy transition; green innovation and decarbonization; and the social and economic impact of opioid abuse

Abstract

This thesis explores the role and impact of economic agents in key societal challenges. From the impact of responsible institutional investors on green capital expenditures to the nuanced dynamics of innovation and carbon emissions reduction, and the economic ramifications of the opioid overdose epidemic, each chapter reveals the interconnected nature of environmental, social, and economic factors. Together, they underscore the significance of understanding the relationship between various stakeholders and their resulting outcome to foster more sustainable economies.

In the first chapter, I study institutional investors' role in driving corporations' net zero energy transition. Exploiting regional differences in the proportion of institutional investors with sustainable preferences, I use the cross-listing of European and Asian headquartered firms in the United States as a negative responsible ownership shock. My findings suggest that responsible institutional investors can help accelerate corporate green capital expenditures by exerting influence on management.

In the second chapter, we analyse corporate green and brown R&D activity worldwide and its effects in reducing carbon emissions. We show that green innovation does not predict future reductions in carbon emissions of firms in the same sector, firms in other sectors, and across countries in the short- or medium-term. As promising as green technological breakthroughs sound, what ultimately matters for the transition to net zero is adoption of these green technologies at scale.

In the third chapter, we investigate the impact of opioid abuse on real estate prices. Using variation in opioid prescription rates induced by the staggered passage of opioid-limiting legislation, we find that a decrease in opioid usage results in an increase in county-level house prices. Consistent with improvements in local real estate quality and increases in local demand, we also document a decrease in mortgage delinquencies and vacancy rates, and an increase in home improvement loans and population inflow.