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The influence of the Sovereign Wealth Fund investment on the firm ESG reputation risk

The influence of the Sovereign Wealth Fund investment on the firm ESG reputation risk

Speaker: Professor Hisham Farag, University of Birmingham, United Kingdom

Time: 9.30 am – 11.00 am

Date: Monday 23rd October 2023

Location: C9 building – Room 205


  • 30 am – 10.30 am: Research presentation
  • 30 am – 11.00 am: Mentoring session


Based on the two competing theoretical arguments of contracting versus predatory, we examine the effect of Sovereign Wealth Funds (SWF, henceforth) on corporate ESG reputation risk. We find a strong positive association of SWF ownership on firm ESG reputation risk in line with the predatory view of SWF as institutional investors. The results highlight that state expropriation risk and political agenda may be detrimental to a firm reputation. Our moderation enquiry for SWF-firm pairs documents the existence of toxic triangle of the SWF, the stake (higher SWF ownership) and the institutions (lower institutional proximity) where we show proximal formal and informal institutions mitigate the reputation damage facing a firm with SWF ownership. The increase in reputation risk is corroborated by deterioration of firm operating and market-based performance associated with SWF ownership. We maintain firm reputation risk could be an important component of the “SWF discounts” which are generally recognised in the investment literature.


Hisham Farag is a Professor of Finance, Head of Research at Birmingham Business School, and Director of Sustainable Financial Innovation Research Centre (SFiC) at the University of Birmingham. His current research areas are Sustainable Finance, FinTech, Corporate Finance and Corporate Governance, in which he published widely in internationally renowned journals e.g., British Journal of Management, Journal of Financial and Quantitative Analysis, Journal of Corporate Finance, European Financial Management, Journal of Economic Behavior and Organization, European Journal of Finance, Journal of Business Ethics, and Corporate Governance: An International review among others. He holds a PhD in Finance from the University of Birmingham, UK. Hisham is a qualified Non-Executive Director and a member of the Investments sub-committee at the University of Birmingham. He has extensive industry experience as a financial consultant and a successful track record in attracting research funding from reputable institutions. Hisham is the Editor-in-Chief of Journal of Sustainable Finance & Investments and serves as an Associate Editor of the European Journal of Finance, Review of Corporate Finance, International Review of Economics & Finance, International Journal of Finance & Economics, Research in International Business & Finance and Business Ethics: the Environment & Responsibility.


Dr. Thai Minh Hanh, School of Economics and Management, Hanoi University of Science and Technology





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