Publications

Firm Internationalization and Emissions Reduction: International Evidence [SSRN] [BAR] [Climate Finance]

with Lingxia Sun, Jongmoo Jay Choi, and Hoje Jo

• The British Accounting Review, Forthcoming

Working Papers

(* - presented by a co-author)

The Surprising Performance of Green Retail Investors: A New (Behavioral) Channel [Behavioral Finance] [Climate Finance] [Household Finance]

with Sumit Agarwal, Pulak Ghosh, Hong Zhang, and Jian Zhang

Abstract: Contrary to the prevailing wisdom that green investors willingly accept lower returns for sustainable investment, our analysis of account-level data from a major Indian bank indicates the opposite. We find that investors with a higher proportion of green stocks in their portfolios achieve superior risk-adjusted portfolio returns. To explain this surprising observation, we hypothesize—and empirically verify—that green investments may help investors mitigate detrimental behavioral bias, such as the disposition effect and under-diversification. Alternative mechanisms related to stock selection ability, aggregate demand shocks, and risk mitigation fail to explain green performance. Instead, tests utilizing abnormal temperatures as exogenous shocks support a causal interpretation of our findings. These results suggest a novel behavioral channel for fully understanding the implications of green preferences.

• 2024 SFS Cavalcade Asia-Pacific*, 2024 Australasian Finance and Banking Conference, 2024 SMU Summer Finance Research Camp, 2025 ASU-HKU Interdisciplinary Conference*, 2025 HKU Governance and Sustainability PhD Workshop, 8th GRASFI Annual Conference, 2025 FMA Annual Meeting

Flight-to-Bitcoin [SSRN] [FinTech]

with Gloria Yang Yu and Jinyuan Zhang

Abstract: This paper documents flight-to-Bitcoin (FTB), a phenomenon whereby Bitcoin demand increases with economic policy uncertainty. Exploiting segmentation in Bitcoin markets, we show that heightened policy uncertainty drives increases in local Bitcoin premium, local trading volume, and migration to self-custodial wallets. FTB is more pronounced in countries with weak trust in government, a relationship amplified by stringent capital controls. Trust-eroding events---including corruption scandals, monetary policy instability, and high inflation---intensify FTB. Comparative analysis with gold and other safe-haven assets reveals that FTB does not reflect conventional flight-to-safety motives but instead represents investors' pursuit of a decentralized asset independent of state control.

Are “Arbitrageurs” Less Biased in Practice? Evidence from the Cryptocurrency Market [Behavioral Finance] [FinTech] [Household Finance]

with Pulak Ghosh, Ruxue Gong, and Hong Zhang

Abstract: Behavioral biases are well-documented among less sophisticated investors. Are sophisticated investors exploiting arbitrage opportunities—often referred to as arbitrageurs—less affected by these issues in practice? To explore this question, we analyze account-level trading data from a leading cryptocurrency exchange in India and identify arbitrageurs-in-practice and noise traders using triangular arbitrage opportunities. While arbitrageurs-in-practice outperform noise traders, we find that they are not immune to behavioral biases. In fact, they often exhibit higher levels of biases, with their returns being more negatively impacted by a composite behavioral bias score than those of noise traders. The aggregate behavioral biases of arbitrageurs-in-practice also negatively impact market efficiency. Our findings challenge traditional assumptions about arbitrageurs and reveal a novel form of limits to arbitrage, particularly in emerging securities markets such as cryptocurrencies.

• ABFER 12th Annual Meeting*