This Ph.D. thesis, comprising two empirical chapters, assesses the effect of institutional
investors on a portfolio company’s decisions about sustainability. I focus on sustainability
outcomes that capture the actual performance of companies. In the first empirical study, I
employ a setup of MSCI-ACWI index addition that increases institutional ownership through
benchmarking and diversification for companies across forty-six countries worldwide. In the
second empirical study, I employ a setup of the distance between institutional investors, which
is an immutable factor to determine the strength of investor connections.
To examine whether Institutional Ownership (IO) mitigates ESG-Misbehavior (ESGMVR), I examine two hypotheses based on two questions. Do cross-sectional and temporal
variations in IO provide insight into future ESG-MVR variations for their portfolio firms?
Second, does the impact of IO on ESG-MVR vary depending on the investor type? With a
battery of robustness tests, I show that IO mitigates ESG-MVR. This empirical chapter
illustrates that institutional investors (II) help promote positive sustainability practices and
manage future cases of ESG-MVR.
In my second study, I investigate the impact of well-connected II on the portfolio
company’s carbon emissions. I examine three hypotheses based on the question: do wellconnected II influence carbon emissions? How does well-connected II prioritize mitigating
carbon emissions while promoting cohesion among their counterparts? I run a battery of
robustness tests and show that well-connected II reduces carbon emissions. This empirical
chapter illustrates that well-connected II promote sustainability practices through active
monitoring and activism.
In my thesis, I emphasize that investors demonstrate responsibility in their investment
decisions and prioritize the sustainable performance of their portfolio companies, which
significantly influences their decision-making process.
| Date of Award | 19 Aug 2025 |
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| Original language | English |
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| Awarding Institution | - University Of Strathclyde
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| Sponsors | University of Strathclyde |
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| Supervisor | Chandra Thapa (Supervisor) & Graeme Acheson (Supervisor) |
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