Three Essays in Financial Economics

Adrien Alvero

This dissertation studies three topics in financial economics. In the first chapter, "ESG Investing in Emerging Markets: Betting on Firm Fundamentals or Riding Investor Preferences?", we examine the relation between firms' environmental, social, and governance (ESG) practices and the pricing of corporate bonds in emerging markets, which is an important yet understudied market for ESG-related issues. Firms with different ESG scores can have different costs of capital, either because ESG scores help forecast future cash flows -- the "fundamental" channel -- or because investors have non-pecuniary preferences for high-ESG-score assets -- the "preference" channel. We identify the existence of a preference channel with a natural experiment -- the historical opening of the Chinese onshore bond market -- that leads to an increase in the proportion of international investors, who are more...