Finance @ Utrecht University School of Economics

𝗪𝗲 𝘄𝗶𝘀𝗵 𝗲𝘃𝗲𝗿𝘆𝗼𝗻𝗲 𝗵𝗮𝗽𝗽𝘆 𝗵𝗼𝗹𝗶𝗱𝗮𝘆𝘀 𝗮𝗻𝗱 𝗮 𝗴𝗼𝗼𝗱 𝘀𝘁𝗮𝗿𝘁 𝗶𝗻𝘁𝗼 𝟮𝟬𝟮𝟱! 𝗪𝗲 𝘁𝗵𝗮𝗻𝗸 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗳𝗼𝗹𝗹𝗼𝘄𝗲𝗿𝘀 𝗳𝗼𝗿 𝘁𝗵𝗲𝗶𝗿 𝗶𝗻𝘁𝗲𝗿𝗲𝘀𝘁 𝗶𝗻 𝗼𝘂𝗿 𝘄𝗼𝗿𝗸. We just closed our year with a very special section dinner including some karaoke for the very brave. So we thought it’s time to look back at 2024. 👏 We welcomed two new colleagues in our section: Raginee Baruah and Nancy Edwards. 👩🎓 Our three master’s programs welcomed about 180 new finance students and our group delivered excellent teaching with real-world perspective, e.g. with tons of guest lectures and industry mentors, Optiver trading competition, our 2nd Hackathon (sponsored by Upvest), and our Finance Speaker Series (Female x Finance, Robeco, VanEck, Rabobank, MG Partners, ING, DUFAS). Our students also won several prize including the CFA Research Challenge (Benelux) and best thesis awards. 📝 Our group published 33 papers (among others in Management Science, Journal of Corporate Finance, Nature Communications, and Economic Policy), presented their recent work at many conferences, were interviewed by newspapers and in podcasts, and received various best paper awards. 👩🏫 We welcomed 17 external speakers in our finance research seminar: Dong Lou, Paul Smeets, Marco Pagano, Alexey Ivanshchenko, Martijn Boermans, Steven Ongena, Simon Trimborn, Andreas Brogger, Johannes Stroebel, Alexander Butler, Stefan Zeisberger, Fahad Saleh, Lorenzo Bretscher, Stefan Palan, Jantke de Boer, Marta Szymanowska, and Kelly Shue. 🌍 We co-organized various conferences and workshops and served as scientific committee members: among others the 2nd European Sustainable Finance PhD Workshop, and the 1st Dutch FECS Workshop. 🙏 And lastly, we reached over 6,600 followers on LinkedIn! Thank you so much! 🎅 This is all to say how grateful we are with our achievements, individually and as a team. Thank you so much for your support. We can’t wait for 2025. Happy holidays and see you next year.   #merryxmas #seminar #sustainablefinance #assetpricing #corporatefinance #financialmanagement #finance #uufinance #usefinance #utrechtschoolofeconomics

Christmas present from the editor, our paper 'A European Climate Bond' joint with Carmine Russo Antonia Pacelli Marco Pagano just published as editor's choice and free access in Economic Policy journal: https://lnkd.in/d7gwS66B Finance @ Utrecht University School of Economics WU (Vienna University of Economics and Business) WU Institute for Ecological Economics Stefano Battiston antoine mandel European Climate Foundation

Last keynote speech of the year in a wonderful - and sunny - location: Rome, Banca d'Italia's workshop on the economic implications of climate change. Looking back, it has been a very intense #climate #finance year in terms of #research work&publications, #policy #applications (e.g. the NGFS short-term climate scenarios, the European Commission ESG UPTAKE project), and #team #work and development. I am very grateful to my team, to my old and new coauthors, as well as to the central bankers and financial authorities I had the opportunity to work with. I learned a lot, and be sure I will apply this knowledge in the new year's research developments. For 2025, in my basked I have the support to the launch of the NGFS short term scenarios; the launch of a new Horizon Europe project on #biodiversity #finance #risk; quantification of #nature-#finance flows; quantification of the #insurance #protection #gap in Europe, working with a growing team (check out our vacancy on #biodiversity #finance!). May 2025 be a fruitful year of research and policy applications in #climate #finance for you all :) Maria J Nieto Giacomo Bressan Anja Đuranović Karl Naumann-Woleske Carmine Russo Antonia Pacelli Marco Pagano Stefano Battiston antoine mandel Nepomuk Dunz Andrea Mazzocchetti Denitsa Angelova Moritz Marpe Cara Dabrowski Maurizio Montone Lucia Alessi Monica Billio Marie Brière Peter TANKOV David Zerbib Karen Khanh Huynh, PhD Stefano Ramelli Elisa Giuliani Régis Gourdel Dr Nicola Ranger Luca De Angelis Luca Zanin Arthur Hrast Essenfelder Finance @ Utrecht University School of Economics WU Institute for Ecological Economics

𝗘𝗦𝗚 𝗙𝘂𝗻𝗱 𝗡𝗮𝗺𝗲𝘀: 𝗠𝗲𝗮𝗻𝗶𝗻𝗴𝗳𝘂𝗹 𝗖𝗵𝗮𝗻𝗴𝗲 𝗼𝗿 𝗠𝗮𝗿𝗸𝗲𝘁𝗶𝗻𝗴 𝗠𝗼𝘃𝗲? BNP Paribas Asset Management recently spotlighted research conducted by members of our faculty: "𝘙𝘦𝘯𝘢𝘮𝘪𝘯𝘨 𝘸𝘪𝘵𝘩 𝘗𝘶𝘳𝘱𝘰𝘴𝘦: 𝘐𝘯𝘷𝘦𝘴𝘵𝘰𝘳 𝘙𝘦𝘴𝘱𝘰𝘯𝘴𝘦 𝘢𝘯𝘥 𝘍𝘶𝘯𝘥 𝘔𝘢𝘯𝘢𝘨𝘦𝘳 𝘉𝘦𝘩𝘢𝘷𝘪𝘰𝘶𝘳 𝘢𝘧𝘵𝘦𝘳 𝘌𝘚𝘎 𝘍𝘶𝘯𝘥 𝘙𝘦𝘯𝘢𝘮𝘪𝘯𝘨", co-authored by Kayshani Gibbon, Jeroen Derwall, Dirk Gerritsen, and Kees Koedijk. The article explores the growing trend of ESG renaming in mutual funds and its implications for transparency, fund management, and investor behaviour. ⁠ Some of the key components that the article sheds light on: 💠 Fund managers don’t rename for show—portfolios typically reflect a real commitment to sustainability after adopting ESG names. 💠 ESG renaming drives measurable improvements, including better ESG scores, reduced carbon intensity, and less exposure to controversial industries. 💠 Investor response is clear: funds with ESG-oriented names see higher inflows, especially in Europe. 💠 Costs remain relatively stable, showing that aligning portfolios with sustainability doesn’t necessarily increase expenses. As noted in the BNP Paribas article, implementing policies to ensure that fund names accurately reflect its sustainability ambitions is crucial. This serves to reminds us that while names are important in signalling intent, the actions behind them matter even more. 👉 Read the full article here: https://lnkd.in/eyCnBM-N 👉 The research paper can be accessed on SSRN: https://lnkd.in/d6Nca7jm What are your thoughts on ESG investing? Can ESG funds truly drive impact, or is there more to the story? #SustainableFinance #ESGInvesting #usefinance #ClimateFinance #FinanceForGood #USE #Finance #Research #uufinance Utrecht University School of Economics European Centre for Alternative Finance

Last week I had the pleasure to present the paper 'A European Climate Bond' (joint with Marco Pagano Antonia Pacelli Carmine Russo and forthcoming in Economic Policy Journal) at two important events on #climate #finance, i.e. the Green Finance Research Advances conference at Banque de France and the CEPR - Centre for Economic Policy Research annual symposium. Key message of the paper: the EU climate investment gap is larger than previously estimated by the European Commission, and underfunded by 50% at least. The recent EU financing investment priorities that do not include climate risks, and the poor ambition of the COP29, mean this gap is a lower bound. Climate risks like the 1-100 RP flood in Valencia would not be isolated events anymore by the end of this 7 years new Commission. Underfunding climate means investors may start to revise their expectations on the EU countries' ability to withstand climate risks, affecting ratings and the cost of new debt (that will be needed for post-disaster reconstruction). We propose a common issuance of EU bonds funded by the revenues of an extended #ETS to front load investments. the EU climate bond will be issued by a supranational authority to avoid regulatory capture at the national level, and reassure investors about its safety. It is an incentives compatible scheme, meaning spending will be allocated based on risk exposure and efficiency in spending money, checked by the EIB against KPIs. The issuance features of the EU climate bond take stock of the limits of the EC issuance of NextGenerationEU bonds. This would represent the first EU #safe #green #bond. Paper here: https://lnkd.in/dZbjQ5Ez Finance @ Utrecht University School of Economics WU Institute for Ecological Economics

It was great to be on the jury of this event, and see the impressive digital initiatives implemented at these companies. Great inspiration for all that attended the event! Finance @ Utrecht University School of Economics VU Controllersopleidingen

𝗖𝗮𝗻 𝗘𝗦𝗚 𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝘀𝗵𝗮𝗽𝗲 𝗱𝘆𝗻𝗮𝗺𝗶𝗰 𝗿𝗶𝘀𝗸 𝘀𝗽𝗶𝗹𝗹𝗼𝘃𝗲𝗿𝘀? 𝗘𝘃𝗶𝗱𝗲𝗻𝗰𝗲 𝗳𝗿𝗼𝗺 𝗖𝗵𝗶𝗻𝗲𝘀𝗲 𝗰𝗮𝗿𝗯𝗼𝗻 𝗮𝗻𝗱 𝗲𝗾𝘂𝗶𝘁𝘆 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 Our colleagues, Mohamad Kaakeh and Kees Koedijk, published their paper titled “Can ESG performance shape dynamic risk spillovers? Evidence from Chinese carbon and equity markets” in Finance Research Letters. The study is joint work with Zhang-Hangjian Chen (Anhui University), Qiming Ren (Anhui University), and Xiang Gao (Shanghai Business School). 𝗥𝗶𝘀𝗸 𝘀𝗽𝗶𝗹𝗹𝗼𝘃𝗲𝗿 refers to how changes in one market’s returns affect another market’s returns. Thus, if an industry’s returns fluctuate significantly (risk), these fluctuations can spillover to the carbon market. The study finds that 𝘪𝘯𝘥𝘶𝘴𝘵𝘳𝘪𝘦𝘴 𝘸𝘪𝘵𝘩 𝘭𝘰𝘸𝘦𝘳 𝘌𝘚𝘎 𝘴𝘤𝘰𝘳𝘦𝘴 often face greater regulatory risks and volatility, and show stronger spillover effects, with the carbon market being a net receiver of these spillovers.  𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿 𝗮𝘁𝘁𝗲𝗻𝘁𝗶𝗼𝗻 mediates this relationship, linking ESG performance to risk spillovers. Lower ESG scores in an industry are connected to higher investor attention towards that industry, and industries with higher investor attention have a greater degree of return spillover to the carbon market. Portfolios combining high-ESG industries and carbon markets show lower risks and better returns, providing 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗳𝗼𝗿 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗮𝗻𝗱 𝗽𝗼𝗹𝗶𝗰𝘆𝗺𝗮𝗸𝗲𝗿𝘀. The authors suggest that stricter environmental regulations and comprehensive ESG reporting standards can help address the higher emissions and associated risk spillovers from low-ESG industries. For investors, integrating ESG scores into portfolio strategies can help manage risks and potentially improve returns. Moreover, monitoring investor sentiment (or attention) can promote greater stability and efficiency in the carbon market. 👉 The paper is available from here (open access): https://lnkd.in/g3HYN5Qb #finance #uufinance #usefinance #utrechtschoolofeconomics #esg #carbon #sustainability

𝗖𝘂𝗿𝗿𝗲𝗻𝗰𝘆 𝗛𝗲𝗱𝗴𝗶𝗻𝗴 𝗳𝗼𝗿 𝗣𝗲𝗻𝘀𝗶𝗼𝗻 𝗙𝘂𝗻𝗱𝘀? This week, I had the privilege of hosting Erwin Hazeveld, Senior Investment Manager Treasury at MN. In my class, Multinational Corporate Finance, Erwin gave an insightful guest lecture on currency hedging in practice. Erwin brought his extensive experience to the forefront, sharing valuable knowledge on managing currency risks for global investments. His talk touched on the following items: ✨ 𝗠𝗡'𝘀 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗙𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸: * Erwin outlined how MN manages over €150 billion in assets for 2 million pension participants and 35,000 employers. * The discussion provided a look into how MN integrates currency hedging into their diverse investment portfolios, including equities, bonds, etc. 🔍 𝗛𝗲𝗱𝗴𝗶𝗻𝗴 𝗗𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀 𝗔𝗻𝗱 𝗧𝗵𝗲 𝗧𝗼𝗼𝗹𝗸𝗶𝘁: * The lecture explored the crucial considerations in deciding to hedge, analyzing the trade-offs between costs, risks, and advantages. * Highlights included an overview of MN’s proprietary MN FX Smart Order Execution Solution, which enhances trading efficiency and risk control. 📉 𝗗𝗲𝘁𝗮𝗶𝗹𝗲𝗱 𝗛𝗲𝗱𝗴𝗶𝗻𝗴 𝗠𝗲𝘁𝗵𝗼𝗱𝘀: * Erwin elaborated on how MN measures FX risk exposure and adjusts it using various instruments like FX spots and swaps. * The techniques discussed included strategic use of derivatives and liquidity management to optimize the effectiveness of hedging strategies. 🌐 𝗘𝗺𝗽𝗼𝘄𝗲𝗿𝗶𝗻𝗴 𝗙𝘂𝘁𝘂𝗿𝗲 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗣𝗿𝗼𝗳𝗲𝘀𝘀𝗶𝗼𝗻𝗮𝗹𝘀: * The lecture ends with the AXP Program 2025, an initiative that partners students with investment professionals for practical learning in institutional investing. A big thank you to you Erwin, for contributing to my class and providing the real-world perspective to our finance students. Your expertise in currency hedging has significantly enhanced our understanding of the challenges and strategies in reducing currency exposures. 𝘐 𝘭𝘰𝘰𝘬 𝘧𝘰𝘳𝘸𝘢𝘳𝘥 𝘵𝘰 𝘮𝘰𝘳𝘦 𝘴𝘶𝘤𝘩 𝘦𝘯𝘳𝘪𝘤𝘩𝘪𝘯𝘨 𝘴𝘦𝘴𝘴𝘪𝘰𝘯𝘴 𝘢𝘯𝘥 𝘤𝘰𝘯𝘵𝘪𝘯𝘶𝘦𝘥 𝘤𝘰𝘭𝘭𝘢𝘣𝘰𝘳𝘢𝘵𝘪𝘰𝘯 𝘸𝘪𝘵𝘩 𝘪𝘯𝘥𝘶𝘴𝘵𝘳𝘺 𝘭𝘦𝘢𝘥𝘦𝘳𝘴! #FinanceEducation #CurrencyHedging #PensionFunds #InvestmentManagement #MN #UtrechtSchoolOfEconomics #UtrechtUniversity #finance #UUfinance #USEFinance Finance @ Utrecht University School of Economics; Utrecht University School of Economics; MN

𝗛𝗼𝘄 𝗰𝗮𝗻 𝘄𝗲 𝘁𝗮𝗰𝗸𝗹𝗲 𝗳𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹 𝘂𝗻𝗰𝗲𝗿𝘁𝗮𝗶𝗻𝘁𝘆 𝗶𝗻 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰𝘀?   👩🏫 On our research seminar on Monday December 2, we welcomed Marta Szymanowska (RSM), who presented the paper: “𝘋𝘦𝘢𝘭𝘪𝘯𝘨 𝘸𝘪𝘵𝘩 𝘍𝘶𝘯𝘥𝘢𝘮𝘦𝘯𝘵𝘢𝘭 𝘜𝘯𝘤𝘦𝘳𝘵𝘢𝘪𝘯𝘵𝘺 𝘪𝘯 𝘍𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘌𝘤𝘰𝘯𝘰𝘮𝘪𝘤𝘴 𝘙𝘦𝘴𝘦𝘢𝘳𝘤𝘩,” co-authored with Conrad Heilmann, and Melissa Vergara Fernández.   🧩 The paper addresses a critical challenge in financial economics: how to assess the effectiveness of empirical research to generate knowledge, explanation, and understanding of financial markets amidst replication crisis, false rejections, and the ambiguity between empirical and theoretical approaches. ☝ Marta showed that research usually worries about statistical and methodological uncertainty but misses to tackle uncertainty that highlights fundamental limitations in knowledge. She emphasized the importance of adopting a more descriptive approach to uncertainty, enhancing explicit communication about it’s source, impact and implications. Eventually allowing for assessing effectiveness of empirical research to advance our understanding of financial markets.   🔎 The key topics of the presentation were: 🔸 The role of deductive vs. inductive reasoning in managing research uncertainty. 🔸The underdetermination problem with an example in asset pricing and the limitations of traditional testing frameworks like CAPM. 🔸Insights into the proliferation of models in financial economics (e.g. the “factor zoo) and the need to discuss the motivation and the details of the auxiliary assumptions in empirical research. 🔸Calls for pursuing a research culture that enhances objectivity by discussing research strategies in terms of objective (cognitive) values and clearer articulation of research goals to elevate field's reliability.   💡 The paper proposes extra-empirical tools to mitigate the fundamental uncertainty. Lastly, the authors call for a joint effort of authors, editors, reviewers, and PhD supervisors to be explicit in their communications about assumptions and limitations. #FinancialEconomics #Research #USE #Uncertainty #InterdisciplinaryCollaboration #Finance #Research #uufinance #usefinance

📈 𝗖𝗮𝗻 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗹𝗼𝗼𝗸 𝗳𝗼𝗿𝘄𝗮𝗿𝗱 𝘁𝗼 𝗮 𝘀𝘁𝗼𝗰𝗸 𝗺𝗮𝗿𝗸𝗲𝘁 𝗿𝗮𝗹𝗹𝘆 𝗶𝗻 𝗗𝗲𝗰𝗲𝗺𝗯𝗲𝗿?   For years, the idea of a December stock market rally has captivated investors and dominated headlines. But is this trend still alive today?     🔎 To answer the question, our colleague Dirk Gerritsen was hosted in an interview by RTL Z Nieuws last Friday. Drawing from analysis on academic research, Dirk unpacked some evidence behind: * 𝗧𝗵𝗲 𝘁𝘂𝗿𝗻-𝗼𝗳-𝘁𝗵𝗲-𝘆𝗲𝗮𝗿 𝗲𝗳𝗳𝗲𝗰𝘁 - where poorly performing stocks are sold off and potentially rebounded in January, either for tax reasons or to boost the performance outlook of businesses. 🎇 * 𝗧𝗵𝗲 𝗦𝗮𝗻𝘁𝗮 𝗖𝗹𝗮𝘂𝘀 𝗿𝗮𝗹𝗹𝘆 - a pattern of above-average returns during the final days of December and the first few trading days of January. 🎅   What does the data say for the Netherlands? 👉 Over the last 50 years, December and Santa Claus returns averaged a healthy 2%, significantly outperforming the norm. 👉 However, in the past 10 years, these returns have decreased to -0.1%, for both periods.   🎓 Dirk emphasizes the importance of taking a critical approach to popular market narratives. While historical trends are fascinating, they can often mislead modern investors when the underlying dynamics shift and misleading headlines. 📺 The whole interview is available from here (in Dutch): https://lnkd.in/eKDMmUiX   💡As the year winds down, what’s your take on the December rally? Are these seasonal effects still worth considering, or should we leave them in the past? Let us know your thoughts below!   #Finance #USE #interview #stocks #drcumberbatch #stockmarket #stockrally #SantaClausrally #usefinance #uufinance Utrecht University School of Economics