Working papers

Abstract: Economic decisions are often delegated to financial intermediaries. Yet beneficiaries rarely have meaningful influence over how their capital is invested. This creates a democratic deficit, especially when investment choices involve trade-offs between financial returns and social impact. We study how informed social preferences can be revealed in the field using deliberative democracy. Partnering with a large Dutch pension fund, we conduct two field experiments that combine a deliberative mini-public with a binding maxi-public vote. In the mini-public, 49 randomly selected members participate in a three-day, in-person process with structured peer deliberation and balanced expert briefings on sustainable investing. After deliberation, participants formulate and vote on recommendations for the pension board. Deliberation increases self-reported investment knowledge. Consistent with this increase, participants' motivations shift from deontological, procedure-based reasoning toward a more consequentialist focus on societal impact. This shift leads participants to recommend expanding impact investing, while no majority supports increasing divestment. Because expanding impact investing may involve lower expected returns and higher risk, the board then tests whether this recommendation aligns with broader member preferences. In a binding vote among 13,619 members, participants are explicitly informed about these trade-offs. A plurality supports expanding impact investing. The board subsequently commits to increasing impact investments by €300 million to €1.2 billion. Together, these results show how investor democracy, implemented through a mini-public paired with a binding maxi-public vote, can elicit informed social preferences in real-world financial intermediation and translate them into consequential investment choices.

The Challenge of Pivotal Timing: Sustainable Shareholder Proposals in Real Asset Investments  (under submission)
With: Juan Palacios, Roberto Rigobon, and Siqi Zheng
Link: https://ssrn.com/abstract=488A3596 & NBER Working Paper Series
Prizes & Awards: Miami Real Estate & Finance Conference (2025 Best Paper)
News Coverage: Harvard Law School Forum on Corporate Governance, E-Axes
Conferences: EFA, Urban Economics Association, GRASFI, FMA, EEA, International AREUEA Conference
Seminars: MIT, Singapore Management University, Penn State, Massey University, Antwerp University, University of Bern, Dutch Sustainable Network, CRED-MIT Workshop on Real Estate Economics, Maastricht University, Open University
Abstract: Institutional investors submit shareholder proposals to improve firms’ environmental and social performance, yet evidence of their effectiveness remains limited. This paper shows that timing matters, as proposals increase sustainable investment only when they align with reinvestment cycles and long-lived assets are due for replacement. SEC filing rules and the unpredictable depreciation of assets create quasi-random timing variation, enabling causal identification. Using novel retrofit data for all U.S. public commercial real estate firms for the period 1990–2022, we find that proposals submitted during reinvestment cycles raise sustainable retrofits by 21.5%; otherwise, there is no effect. These findings are replicated in heavy manufacturing, reinforcing the contention that their efficacy depends on when investors choose to act.

Published Articles

Capital regulation induced reaching for systematic yield: Financial instability through fire sales
With: Martijn Boermans
Link: https://www.sciencedirect.com/science/article/abs/pii/S0378426623002212
Journal: Journal of Banking & Finance (2024), 158, 107030
Media coverage: ESB
Abstract: Credit rating-based capital regulation induces financial institutions to take on additional systematic risk. In this paper, we uncover interconnected channels through which this systematic risk hoarding affects financial stability using a proprietary ECB bond holdings dataset. First, banks and insurance corporations effectively reduce their capital buffers by hoarding bonds with high systematic credit risk. Second, this hoarding increases the portfolio concentration of credit rating-constrained and unconstrained financial institutions. Third, in addition to the general tendency of regulated financial institutions to fire sale bonds after rating downgrades, we reveal even larger fire sales precisely when their regulatory advantages of reaching for systematic yield disappear. Using a shock in capital regulation, we establish this causal relationship between the severity of fire sales and the tendencies of regulatory-constrained financial institutions to seek bonds with high systematic credit risk. Such systematic risk hoarding reduces capital buffer by an additional 16% in economic downturns 

Dissertation

Sustainability of Financial Institutions, Firms, and Investing (Successfully Defended 12 January 2024).
Available at SSRN: https://ssrn.com/abstract=4648257
Awards: Best Business School Dissertation Award 2024
Media Coverage: ESB

Chapter 3: Tilting the wrong firms? Sustainable investing in transitioning firms  (under submission)
With: Dennis Bams
Link: https://ssrn.com/abstract=4126986
News Coverage: Nu.nl, ESB, Financieel Dagblag, Trouw
Conferences: AEA, FMA, EEA, Academy of Management, GRASF, GRONEN Annual Meeting, JMS Annual Meeting, World Finance Conference, Marketing Finance Conference, Portuguese Finance Conference
Seminars: MIT, Stevens Institute of Technology, ISC Paris, Twente University, Maastricht University, Open University

Chapter 2: Heterogeneous stakeholder pressure  (under submission)
With: Dennis Bams and Karen Maas
SSRN: https://ssrn.com/abstract=3906715
Awards: ICPM Research Award
News Coverage: Trouw
Conferences: AEA, AFA (poster), FMA, FMA Europe, World Finance Conference, EURAM, Portuguese Finance Network, GRASFI, Finance Symposium, Globally Sustainable Banking & Finance Conference, Business & Society
Seminars: De Nederlandsche Bank, Maastricht University, Open University, Utrecht University, VU Amsterdam