Research

Publications:

Tarnaud, A. C., and Zakriya, M., 2025. CSR Performance and Firm Value: Disentangling the Role of ESG Rating Providers. British Journal of Management (Forthcoming).

Winner of the Best Paper Award in the 9th International Conference on Accounting and Finance (ICOAF-2024)  held in Danang, Vietnam 

Zakriya, M., and Chams, N., 2025. From “who cares” to “what they care about”: The impact of corporate governance on environmental and social performance in China. Corporate Governance: An International Review, 33 (5), 1277–1298.

Baudoin, L., Zakriya, M., Arenas, D. and Walsh, L., 2023. Would You Walk 500 Miles? Place Stewardship in the Collaborative Governance of Social Ecological System. Journal of Business Ethics, 184 (4), 855–876.

Dumitrescu, A., Jarvinen, J. and Zakriya, M., 2023. Hidden Gem or Fool's Gold: Can Passive ESG ETFs Outperform the Benchmarks? International Review of Financial Analysis, 86, 102540.

(Featured in: "ETF watch: big trends from the last quarter", Investors Chronicle, January 17, 2022; "Così gli Etf Esg battono il mercato", ETicaNews, February 17, 2022; "ESG investing and financial performance", Chapter 4 of Perspectives in Sustainable Equity Investing, May 14, 2022); "ESG Level Factor Investing Strategy", Quantpedia; "ETFs and Related Strategies", The Capital Spectator Research Review, January 20, 2023; "Values-Aligned Investing: Building a Portfolio That Reflects Your Values", abacuswealth.com blog, November 14, 2024.

Dumitrescu, A. and Zakriya, M., 2022. Governance, Information Flow, and Stock Returns, Journal of Corporate Finance, 72, 102168.

(Finalist for Larry Lang Corporate Finance Best Paper Award at the EFMA Annual Meeting, 2019; Semi-finalist for the Best Paper Awards at FMA Annual Meeting, 2019;  Featured in: "Tesla and Elon Musk Show Why Governance Doesn’t Matter—Until It Does", The Wall Street Journal, February 16, 2024; "ESG, Firm Value, Governance", www.esginsights.dk, June 28, 2018)

Dumitrescu, A. and Zakriya, M., 2021. Stakeholders and Stock Price Crash Risk: What Matters in Corporate Social Performance? Journal of Corporate Finance, 67, 101871.

(Finalist of IV Bankinter  Prize for Research in Business Ethics, Business Social Responsibility, Corporate Governance and Sustainability, 2021) 

Dumitrescu, A., El Hefnawy, M. and Zakriya, M., 2020. Golden Geese or Black Sheep: Are Stakeholders the Saviors or Saboteurs of Financial Distress? Finance Research Letters, 37, 101371.

Bermejo, V.J., Campa, J.M., Campos, R.G. and Zakriya, M., 2020. Do foreign stocks substitute for international diversification? European Financial Management, 26(5), 1191-1223.

Working Papers:

What drives corporate ESG? Disentangling the importance of investors, managers, and firms with Vicente J. Bermejo and Antonino Emanuele Rizzo 

Winner of the 2024 Best Paper Award in the 31st Finance Forum of the Spanish Finance Association (AEFIN); Featured in: "Why engagement works better than divestment", Callaway Climate Insights, October 12, 2022

(Revise & Resubmit in the Journal of Financial Intermediation)

We study the relative importance of investor, manager, and firm heterogeneities on firms' Environmental, Social, and Governance (ESG) policies. We find that investor fixed effects explain most of the variation in ESG choices. The improvement in the model fit from adding investor effects is particularly strong for the environmental dimension. Significant associations between investor effects and both voting decisions on ESG proposals and the likelihood that firms are involved in environmental and social misconducts confirm that we capture economically important heterogeneities in investors' behavior. Additional analyses also show stronger empirical support for an underlying channel based on investor influence over ESG policies rather than investor selection of high ESG firms.

CSR Information and Regulatory Activity  with Marco Errico

(Revise & Resubmit in The Accounting Review)

We investigate how regulators adjust their enforcement activities in response to firms’ corporate social responsibility (CSR) information. By exploiting exogenous variation in CSR ratings coverage and enforcement data from the U.S. Occupational Safety and Health Administration (OSHA), we observe an increase in enforcement activity toward newly CSR covered firms. We explore two non-mutually exclusive mechanisms to explain our findings: regulatory learning and firms’ reputational exposure after CSR coverage. Our results are consistent with CSR-related reputation and deterrence as plausible channels. Third-party CSR disclosures increase a firm’s reputational exposure when OSHA activities are incorporated into CSR ratings and disseminated to stakeholders. Consequently, this dynamic increases OSHA’s marginal benefit from its enforcement activities on newly covered firms. Evidence from institutional investor holdings corroborates this reputational mechanism. These findings provide novel insights into how availability and dissemination of CSR information shape regulatory activities.

The Race Among Firms for Carbon Pricing  with Karishma Ansaram and Paolo Mazza

(Revise & Resubmit in the International Review of Financial Analysis)

Although carbon pricing should have a nontrivial impact on firms' environmental performance, prior studies have paid little attention to the type and number of carbon pricing mechanisms (CPMs) that firms adopt simultaneously. Thus, in this study, we analyze multiple CPMs within a single framework, including carbon trading on compliance markets, carbon tax, and internal carbon pricing. By reference to a sample of 2,303 CPM-adopting firms, we capture the relative impacts of the presence of both single and multiple CPMs on firms' environmental performance as measured in terms of Carbon Intensity, Energy Intensity, and Environmental Score. The results show that while a carbon tax can independently lead to significant improvements in environmental performance, carbon trading and internal carbon pricing are ineffective on their own and can even be detrimental in some cases. Significant heterogeneities are found with regard to the effectiveness of CPMs in carbon-intensive sectors versus other sectors and across different regions. Finally, we provide insights into how environmental innovation and board independence moderate the effects of CPMs on environmental performance.

Does the ESG Rating Methodology Matter to Investors? Insights from Breadth of Ownership with Ariadna Dumitrescu and Albane C. Tarnaud

(Featured in: "How Methodological Changes in ESG Ratings Influence Investors", The Columbia Law School Blue Sky Blog, August 12, 2025) 

This paper studies the impact of the Environmental, Social, and Governance (ESG) rating methodology on investor decision-making as revealed by the firms’ breadth of ownership. We leverage the quasi-experimental setting created in 2010 when MSCI changed their data collection criteria for MSCI-KLD ESG Stats following the acquisition of RiskMetrics Group. This exogenous shock allows us to examine whether firms that experienced an increase or decrease in their ratings solely due to the methodological change also saw significant changes in their breadth of ownership. We find that firms with increased ratings saw a significant rise in the number of individual investors. Further tests show that firms’ visibility and stock familiarity are the main drivers of individual investors’ reaction. Conversely, the breadth of institutional investors is unaffected by the change in the rating methodology. Our study contributes to the literature by highlighting the critical role of ESG raters in shaping investor behavior and providing insights into the underlying mechanisms.

Sustain and Deliver: Capturing the Valuation Effects of Corporate Sustainability 

Nominated for Best Paper in Corporate Governance/Social Responsibility at the Financial Markets and Corporate Governance Conference, 2018

This paper identifies a select few indicators from a large set of environmental, social and governance (ESG) factors; and introduces a corporate sustainability measure. Sustainable part of corporate social performance completely explains its well-documented relation with firm values even after controlling for endogeneity. In parallel, those ESG initiatives that are irrelevant to sustainability have no effect on firm values. Moreover, sustainability-based hedge portfolios could have generated abnormal returns of over 4% per year in the sample period. Together, these results imply that only the sustainable aspects of ESG are associated with superior financial performance in terms of both accounting- and market-based value.

Measuring Corporate Governance Using Antitakeover Provisions: A Dynamically Weighted Approach with Ariadna Dumitrescu

This paper presents the "nG (new Governance) Index", an unequal-weighted measure of corporate governance that dynamically captures the heterogeneity of its individual antitakeover components, as an alternative to the equal-weighted G-Index, E-Index, and Gov-Score proposed in the related literature. Our findings show that all antitakeover provisions do not equally influence firms' corporate governance quality, and our proposed nG-Index therefore traces the governance–performance relationship more persistently than an equal-weighted measure does. Further analysis reveals that an nG-Index based zero-investment hedge, going long on a poor governance portfolio and shorting the good governance one, would generate an abnormal return of over 1.33% per month, or about 16% per year. In contrast, a comparable hedge using equal-weighted index shows no significant abnormal returns. Moreover, we find that the heterogeneity of antitakeover provisions is important to show the investors' underreaction to good governance signals and their attentiveness to the riskiness associated with poorly governed firms.

The Non-Financial Spillovers of Financial Information Processing Costs: Evidence from the U.S. XBRL Mandate  with Marco Errico

By exploiting the eXtensible Business Reporting Language (XBRL) mandate in the U.S. as an exogenous shock to information processing cost, we show its causal effect on environmental, social, and governance (ESG) performance. We document a significant increase in firms' ESG Scores after they are mandated to file their financial statements in XBRL format. Further analyses reveal that the XBRL mandate affected the Governance Score the most, followed by the Social and Environmental scores, respectively, and that the magnitude of its effect wanes over time. Our results are robust to multiple falsification tests and alternative identification strategies. We conjecture that XBRL adoption allows financially opaque firms' investors to allocate more time to non-financial ESG information. Upon facing this increased attention, firms' managers respond by improving ESG engagements. Consistent with this view, we find that the XBRL mandate's positive effect on ESG is concentrated in well-monitored, opaque, and high managerial power firms.