ESG Spillovers
Shangchen Li, Hongxun Ruan, Sheridan Titman, and Haotian Xiang
NBER Working Paper No. 31248
May 2023
JEL No. G14,G2
ABSTRACT
We study ESG and non-ESG mutual funds managed by overlapping teams. We find that nonESG mutual funds include more high ESG stocks after the creation of an ESG sibling, and the
high ESG stocks they select exhibit superior performance. The low ESG stocks selected by ESG
funds also exhibit superior performance and despite being more constrained, the ESG funds
outperform their non-ESG siblings. The latter result is consistent with fund families making
choices that favor ESG funds. Specifically, ESG funds tend to trade illiquid stocks prior to their
non-ESG siblings and get preferential IPO allocations.
Shangchen Li
Peking University
Guanghua School of Mangement
No.5 Yiheyuan Road
Haidian District
Beijing
China
lishangchen@pku.edu.cn
Hongxun Ruan
Peking University
Guanghua School of Management
Finance Department
Beijing
China
hongxunruan@gsm.pku.edu.cn
Sheridan Titman
Finance Department
McCombs School of Business
University of Texas at Austin
Austin, TX 78712-1179
and NBER
titman@mail.utexas.edu
Haotian Xiang
Peking University
No.5 Yiheyuan Road
Haidian District
Beijing 100871
China
xiang@gsm.pku.edu.cn

ESG Spillovers