Trading Behavior of Institutional Investors: Investment Decisions, Impact and Sustainability Trends

Abstract

This dissertation investigates institutional investor trading behavior, profit and losses and associated costs while accounting for market structure complexities. The first part shows that the active and passive ownership share influences liquidity and a company’s ESG score. The second part demonstrates that high ESG score stocks display lower information asymmetries. Additionally, this dissertation provides new insights by showing that ESG investments yield negative returns only for stocks with higher information asymmetries. The last part provides evidence that investors can reduce their execution costs by selecting venues with less pre-trade transparency, such as dark pools or periodic auctions.