Eyub Yegen

Dissertation

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