Fabio Martin
University of Giessen - Department of Finance
My research is on sustainable and empirical finance, with a focus on corporate finance and mutual funds. Currently, I am a third-year doctoral researcher at University of Giessen. Before joining Giessen, I graduated in Financial Economics (M.Sc.) from the Erasmus School of Economics (ESE) at the University of Rotterdam.
Publications
with Christina Bannier and Alix Auzepy, (2023), Financial Management
This paper analyzes sustainability-linked loans (SLLs), a new category of debt instrument that incorporates environmental, social, and governance (ESG) considerations. Using a large sample of loans issued between 2017 and 2022, we assess the design of SLLs by evaluating their key performance indicators (KPIs) using a comprehensive quality score. Our findings suggest that SLLs only partially rely on KPIs that generate credible sustainability incentives. We document that SLL borrowers do not significantly improve their ESG performance post issuance and show that stock markets are rather indifferent to the issuance of SLLs by EU borrowers, while SLL issuance announcements by US borrowers are met with significantly negative abnormal returns by investors. These findings call into question the beneficial sustainability and signaling effects that borrowers may hope to achieve by issuing ESG-linked debt.
CFS Working Paper Series No. 688
with Andreas Walter and Martin Becker, (2022), Finance Research Letters
This paper analyzes the effect of the Sustainable Finance Disclosure Regulation (SFDR) on mutual funds and individual investors in the EU. First, we study whether affected funds increase their sustainability compared to a control group. Second, we examine if the regulation makes individual investors allocate more capital into more sustainable funds. In a difference-in-differences setting, we analyze the influence of the regulation on ESG fund scores and fund net inflows. Our results show that affected funds increase their sustainability rating after the policy intervention. Additionally, we find that a better ESG label leads to larger fund net inflows.
presented at: the 2023 FDIR Research Initiative (Ecole polytechnique and Toulouse School of Economics)
Working Papers
Walk the Talk: Shareholders’ Soft Engagement at Annual General Meetings
with Christina Bannier and Alix Auzepy, (2023)
The right to ask questions and voice their opinions at annual general meetings (AGMs) represents one of the few avenues for shareholders to communicate directly and publicly with the firm’s management. Examining AGM transcripts of US companies between 2007 and 2021, we find that shareholders actively express their concerns about environmental, social and governance (ESG) issues in accordance with their specific relationship with the company. Further, they are also demonstrably more vocal about ESG issues at AGMs of firms with poor sustainability performance. What is more, we show that this soft engagement translates into a more negative tone which, in turn, results in lower approval rates for management proposals. Shareholders’ soft engagement at AGMs is hence an effective way to “walk the talk”.
CFS Working Paper Series No. 689
Media Coverage: Absolute Impact Magazin
presented at: the Journal of Financial Research 2023 European Symposium at Bocconi University, Italy; the Conference on CSR, the Economy and Financial Markets, WHU-Otto Beisheim School of Management, 2023, Duesseldorf; SESTEF 2023, Southampton, UK