<p dir="ltr">In the first chapter, I explore the impact of social connections on corporate attention to climate change exposure, focusing on how these connections influence discussions during earnings calls. Using social connection data to capture the transmission of distant shocks, I find that firms in counties more socially connected to disaster areas increase their focus on climate issues compared to less connected counterparts. This heightened attention is associated with real effect, as firms with greater social ties to affected areas significantly reduce their emissions, especially indirect emissions. The findings suggest that social connections play an important role in shaping corporate attitudes towards sustainability and can drive meaningful climate actions.</p><p dir="ltr">In the second chapter, I examine how social networks influence fund managers' evaluation of the climate risks of firms. I show that fund managers tend to decrease the portfolio weights of firms that are located in disaster-affected areas to a greater degree when they have stronger social connections to those regions. This difference remains robust even when controlling for the physical distance between a fund and the disaster area. I show that such a portfolio response is primarily driven by the salience bias channel, which diminishes over time, rather than informational advantage. I do not find any similar change in the portfolio weights of firms located in the neighboring area of the disaster. Moreover, I find no significant performance difference between firms in the disaster area and those in the neighboring area in the post-disaster period.</p><p dir="ltr">In the third chapter, co-authored with M. Deniz Yavuz and Adam Reed, we report evidence that the demand for high short interest stocks by short sellers declined after the meme stock event in January 2021 due to an increased risk of short squeeze induced by the meme stock rally. We show that the positive association between high short interest and next-day borrowing cost decreased after the meme stock event. As the decline in short-selling demand varied across short interests of stocks, the demand curve in the equity lending market became steeper and inelastic after the event. Moreover, we show that this change in short-selling demand leads to higher post-event return predictability of short interest.</p>
| Identifer | oai:union.ndltd.org:purdue.edu/oai:figshare.com:article/27190752 |
| Date | 10 October 2024 |
| Creators | Alex Woong Bae Kim (19820298) |
| Source Sets | Purdue University |
| Detected Language | English |
| Type | Text, Thesis |
| Rights | CC BY 4.0 |
| Relation | https://figshare.com/articles/thesis/Empirical_Essays_on_Social_Finance/27190752 |
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