Rotman School of Management, University of Toronto

Main Content

Eyub Yegen

Eyub Yegen

Eyub Yegen

PhD Student
6th Year, Finance

Dissertation

Title: Do Institutional Investors Mitigate Social Costs of Privatization? Evidence from Prisons

This paper examines whether institutional investors mitigate social costs that arise when government services are outsourced to private enterprises. Using hand-collected data on U.S. prisons, I find that privatization is associated with an increase in prisoner suicides by up to 39%. However, institutional investors of public companies managing private prisons decrease suicide rates by one third. These effects are stronger for long-term institutional investors since failing to internalize social externalities negatively impacts the long-term success of portfolio firms. Evidence from a tax reform that exogenously increases institutional ownership of prison management companies suggests that the relationship between ownership and social outcomes is causal. To explain these results, I show that institutional investors have incentives to be socially responsible due to litigation and reputation risks.


Projects

  • 2020  Do Institutional Investors Mitigate Social Costs of Privatization? Evidence from Prisons
  • 2020  Investing in Influence: Investors, Portfolio Firms, and Political Giving Collaborators:   Marianne Bertrand (Chicago Booth), Matilde Bombardini (UC Berkeley Haas), Raymond Fisman (Boston), and Francesco Trebbi (UC Berkeley Haas)
  • 2019  Common Ownership and Portfolio Rebalancing
  • 2020  Strategic Corporate Social Responsibility Collaborators:   Marianne Bertrand (Chicago Booth), Matilde Bombardini (UC Berkeley Haas), Raymond Fisman (Boston), and Francesco Trebbi (UC Berkeley Haas)
  • 2020  Corporate Social Responsibility Measurement Collaborators:   Matthew Shaffer (University of Southern California)
  • 2020  What Determines Fund Flows? Collaborators:   Susan Christoffersen (Rotman) and David Musto (Wharton)
  • 2019  Cartels, Ownership, and Competition Collaborators:   Niklas Duerr (Centre for European Economic Research)

Research Interests and Other Info

    Institutional Investors; Corporate Social Responsibility; Welfare; Political Economy

Login to my account

© Rotman School of ManagementThe Rotman School of Management is accredited by the Association to Advance Collegiate Schools of Business (AASCB)