Essays on Corporate Social and Environmental Performance

This thesis consists of three essays on corporate social and environmental performance. The first chapter explores how capital markets shape corporate environmental policies. The last two chapters study the determinants and implications of employee satisfaction and gender differences at work. The first chapter uses two quasi-natural experiments, brokerage closures and mergers, to explore the causal effect of analyst coverage on corporate environmental policies. I find firms significantly increase corporate pollution after an exogenous decrease in analyst coverage, suggesting that analyst monitoring plays a pivotal role in restricting environmentally harmful behaviors. This effect is more pronounced for firms with low initial analyst coverage, weaker corporate governance, less regulatory scrutiny, and incorporated in states where stakeholder constituency laws are not enacted. Reduced investment in pollution abatement, deteriorating environmental internal governance mechanisms, and a decreased role and influence of institutional investors are possible channels through which financial analysts influence corporate pollution. The second chapter investigates the gender satisfaction gap at work. Using Glassdoor employer reviews, I find that females are less satisfied at work than males. In particular, females care more about work-life balance, while this difference in workplace preference vanishes at the manager level, illustrating the role of selection. Exploring further implications, I show that family-friendly workplaces with small gender satisfaction gaps exhibit superior firm performance. This finding is stronger in industries relying more on female employees, firms with stronger corporate governance, and financially unconstrained firms. The third chapter studies IV conditions and the relation between financial employee satisfaction. Using Glassdoor data, this chapter documents employee satisfaction is substantially lower in financially constrained firms. Decomposing the employee ratings, I find financial constraints are negatively associated with employees’ assessments of work-life balance, career opportunity, and senior leadership. Further analysis suggests employee-friendly workplaces and cultures are beneficial for firm valuation. Overall, this chapter highlights that employee satisfaction could be an important channel through which financial constraints reduce firm value.