Seminar (Dept. of Finance)

Title: Launching for the “Greater Good”: Spillover Effect of ESG Funds

Speaker: Linlin Ma, Associate Professor, Peking University HSBC Business School, China

Time: 10:00-11:30, Oct 20, 2023(Friday)

Venue: Room 1008, Mingde Business Building

Language: English

ABSTRACT:

The introduction of new ESG funds is often marketed as a milestone in promoting socially responsible investing by fund families. In this paper, we examine the externalities of launching an ESG fund to the fund family. We find that introduction of a new ESG fund results in a significant increase of cash inflows to the other member funds in the family. However, we observe no corresponding changes in the ESG profiles or abnormal returns of these funds. The spillover effect is primarily driven by unsophisticated retail investors and becomes more pronounced as public attention to ESG issues grows. Our findings suggest that flow spillover could be an important supply-side determinant influencing the offering and design of ESG funds, thereby shaping the current landscape of ESG investing.

SHORT BIOGRAPHY:

Linlin Ma is an associate professor of finance at Peking University HSBC Business School. She obtained her Ph.D.in Finance from Georgia State University. Her research interests lie in mutual funds and hedge funds. Her work has been published in the Journal of Finance, Journal of Financial Economics, Management Science and other leading journals.