Kandidatuppsatser i finansiell ekonomi

Permanent URI for this collectionhttps://gupea-staging.ub.gu.se/handle/2077/45134

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Investing with purpose: ESG and Gender in Swedish mutual funds
(2025-08-18) Johansson, Elliot; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This thesis investigates actively and passively managed Swedish mutual funds performance from the perspective of sustainability and gender diversity. Despite widespread research around the world, there are limited studies taking these factors into consideration in the Swedish fund market. Using panel regression across 2018-2023 fund-level data, the study examines the association of net asset value (NAV) with aggregated ESG scores and gender diversity in boards and executive positions at the portfolio company level. The findings reveal that gender diversity at the executive level in the funds holdings is positively associated with performance, whereas diversity at the board level in the funds holdings is negatively associated. ESG scores and active or passive management strategy have varying degrees of influence on performance outcomes as well. The management style of the funds show that Active funds can reverse the effect on NAV by gender diversity metrics on the asset level. The conclusions support the application of modern portfolio theory, institutional theory, and behavioral finance, with a focus on the influence of cultural expectations and investor behavior on fund performance. The thesis contributes to ongoing discussion of responsible investment practice through the use of the integration of sustainability, and diversity measures into fund analysis and offers insights for fund managers and investors in the Swedish market.
Determinants of Capital Structure in Swedish Unlisted SMEs
(2025-07-04) Bewick, Jonathan; Gunnarsson, Vilgot; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This thesis investigates the determinants of capital structure among Swedish unlisted small and medium-sized enterprises (SMEs), a segment often overlooked in mainstream finance literature. Drawing on four theoretical frameworks, the Pecking Order Theory, Trade-off Theory, Agency Theory, and the Financial Growth Cycle, we examine how firm-specific characteristics influence leverage decisions. Using a panel dataset of 2,000 Swedish SMEs between 2014 and 2018, we apply fixed-effects regression models with industry and year controls. The empirical results show strong support for the Pecking Order Theory: both profitability and liquidity are negatively associated with leverage, suggesting that SMEs prioritize internal funding. The Trade-off Theory receives partial support, particularly through the positive impact of effective tax rates and asset structure on leverage. Conversely, variables such as risk, growth opportunities, and non-debt tax shields exhibit no statistically significant effects. Interestingly, firm size and age display negative relationships with leverage, challenging conventional theory and highlighting the influence of SME-specific financing constraints. Our findings underscore the limited explanatory power of traditional theories when applied to privately held firms in bank-dominated economies. The study contributes to a more context-sensitive understanding of SME financing and offers insights relevant to policymakers, lenders, and scholars interested in capital access and financial behavior in non-listed firms.
Women on Boards An empirical study of board gender diversity and firm performance across Europe
(2025-07-04) Velarde, Cielo Lin; Ollila Norberg, Eveliina; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This thesis explores whether female presence on corporate boards is associated with a difference in firm performance, and whether this relationship differs during periods of economic uncertainty, particularly the COVID-19 pandemic. Examined in the light of Upper Echelons Theory, Critical Mass Theory, and Risk-Aversion Theory, and supported by previous literature, the study provides a deeper understanding of gender diversity as a strategic factor in corporate performance. Through a quantitative approach, the analysis uses panel data from European publicly listed firms between 2016 and 2023. Firm performance is measured using both accounting-based (Return on Assets) and market-based (Tobin’s Q) indicators. The study applies Ordinary Least Squares (OLS), Difference-in-Differences (DiD), and Propensity Score Matching (PSM) to ensure reliable results. The results indicate that firms with at least 30% female board representation exhibit a significantly better performance. However no conclusion can be drawn about whether this relationship changed during the COVID-19 crisis. The findings contribute to the ongoing gender diversity debate and highlight the value of inclusive leadership and equitable decision-making in institutions and reinforce the argument that inclusive leadership contributes to both operational efficiency and market valuation across European firms.
Post-Merger Performance in Nordic SME M&A:The Role of Cross-Border Transactions and Cash Financing
(2025-07-02) Olausson, Karl; Rados, David; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This thesis investigates the impact of financing structure and geographic scope on post-merger performance among small and medium-sized enterprises in the Nordic region. Despite the frequency of cross-border mergers and acquisitions, existing literature has largely focused on large, publicly traded firms, leaving a significant research gap concerning SMEs. Using a dataset of 176 Nordic SME acquisitions between 2015 and 2018, this study evaluates whether cash-financed M&As outperform those financed through equity or mixed methods, and whether cross-border transactions yield different outcomes compared to domestic deals. Performance is measured using changes in Return on Assets over a five-year post-merger period, analyzed through Ordinary Least Squares regression models with fixed effects. The results indicate that neither payment method or cross-border status significantly predicts post-merger ROA, suggesting that traditional M&A theories, such as the Pecking Order and Agency Theories, may operate differently in SME contexts. However, firm-specific factors, particularly pre-merger profitability and industry alignment, exhibit stronger influence on outcomes. Notably, cross-industry mergers were associated with improved performance, potentially reflecting strategic, opportunity-driven motives among SMEs. The study contributes empirical evidence to a relatively underexplored domain, offering insights relevant to academics, policymakers and practitioners engaged in SME internationalization and financing strategy.
Do ESG-Scores Explain Returns in the U.S. Equity Market? Incorporating ESG-Scores within a Multi-Factor Framework
(2025-07-01) Myrgård, Mathias; Åkerlund, Devin; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
In an era where sustainable investing endorses both ethical alignment and economic promise, a critical question remains: do firms with stronger ESG-incentives actually yield greater stock returns? This thesis explores that topic in the U.S. stock market. Building on established multi-factor asset pricing models, the study incorporates ESG-scores into the models, in order to determine whether sustainability influences asset pricing. Using data from 467 firms, ranging from 2010 through 2023, the thesis uses rigorous methods, such as ordinary least squares regression, Fama-MacBeth two-stage regression, and Gibbons, Ross, and Shanken test, in order to assess ESG’s role in return variation. The results indicate a subtle trend in that integrating ESG-scores into traditional multi-factor models moderately enhances the explanatory power, suggesting that ESG carries some informational weight, however, the models often fall short in delivering consistent statistical significant variables. In essence, ESG-leaders did not reliably outperform ESG-laggards, based on the findings in this thesis. This outcome indicates that, at least within the U.S. equity market the last few decades, strong sustainable and ethical performances have not automatically translated into outperformance in stock returns. It highlights the notion that ESG-investing may suggest an emphasis on values over value, and leaves the door open for further debate on when, or even if, the market will price sustainable incentives.
The Impact of Interest Rate Hikes and Cuts on U.S. REITs: The Role of Financial Leverage
(2025-07-01) Alm, Valther; Nilsson, Casper; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This study examines whether U.S. equity REITs with different capital structures react differently to interest rate changes. An event study approach is used to analyze cumulative abnormal returns (CARs) around two Federal Reserve interest rate announcements: a 75 basis point rate hike on 2 November 2022 and a 50 basis point rate cut on 18 September 2024. The sample includes 158 listed REITs using daily total return data from CRSP and financial metrics from Compustat. Cross-sectional regressions incorporate firm leverage, market beta, idiosyncratic volatility, size, earnings-announcement and sector affiliation. The findings reveal an asymmetric market response. The rate hike led to an average CAR of minus 0.94 percent, but firms with higher leverage experienced smaller losses. The result challenges the idea that increased leverage inherently leads to greater risk in a rising rate environment. In contrast, the rate cut produced a slightly negative CAR on average (minus 0.12 percent) and leverage showed no statistical significance. Only market beta and firm size explained limited cross-firm variation. These results suggest that the impact of monetary policy on REIT valuations depends on both the direction of the rate change and firm level financial characteristics, including debt structure and hedging strategies, highlighting the need for a more nuanced understanding of capital structure regarding publicly traded U.S REITs.
Backing winners or hyping losers? A study on Venture Capital-backed IPOs and long term success in the Nordic stock markets
(2025-07-01) Andersson, Bianca; Persson, Teo; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This thesis investigates the long-term performance of venture capital (VC)-backed initial public offerings (IPOs) in the Nordic market. While prior research has focused primarily on short-term IPO outcomes in the U.S., this study contributes by examining post-IPO success in Sweden, Norway, Finland, and Denmark. Using a sample of 443 IPOs from 2010 to 2022, we apply buy-and-hold abnormal returns (BHAR), ordinary least squares (OLS) regression, and descriptive statistics to assess stock performance up to two years after listing. In addition to industry and year fixed effects, our final model includes firm-specific controls such as first-day return and lock-up expiration return to isolate the long-term effect of VC involvement. The results show that VC-backed firms consistently outperform non-backed firms in terms of long-term stock returns. These findings support the certification and signaling theories, indicating that VC participation acts as a credible signal of firm quality and reduces information asymmetry. Contrary to the overvaluation hypothesis, no evidence of post-IPO value correction is found. This study highlights the role of venture capital in enhancing long-term stock market outcomes and suggests directions for future research on operational performance and firm survival.
Insider Trading and Market Efficiency: Evidence from the Swedish Stock Market
(2025-06-25) Astudillo, Adam; Mulic, Endi; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This thesis investigates whether insider trading announcements influence stock prices in the Swedish stock market and examines the market’s efficiency in processing such information. Or more specifically, challenges the semi-strong form of market efficiency. A sample of 30 insider transactions are analyzed, divided equally into 15 buy-side and sell-side events. Using an event study methodology, average abnormal return (AAR) and cumulative average abnormal return (CAAR) are computed to measure market reactions surrounding the announcement dates. While the AAR results are statistically insignificant for both groups, the CAAR analysis reveals statistically significant and directional price movements: insider sales are followed by sustained negative performance, whereas insider purchases lead to a delayed but consistent upward trend. These findings indicate that the Swedish market does not incorporate insider information immediately, but rather adjusts gradually over time. The results challenge the assumptions of semi-strong form of market efficiency and suggest the existence of exploitable trading opportunities based on public insider disclosures. Our conclusions contribute to the literature on market efficiency, while also offering practical implications for investors seeking to interpret insider behavior.
Do Domestic and Cross-Border M&As Generate Different Bidder Returns? Evidence from Swedish Acquirers.
(2025-06-25) Andersson, Ebba; Edlind, Felix; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This study examines whether bidder returns differ between domestic and cross-border deals when a merger or acquisition (M&A) is announced. The focus is on Swedish acquirers over a time horizon ranging from the beginning of 2014 to the end of 2024. Three hypotheses are tested around the questions: Do domestic M&As yield significantly higher returns than cross-border M&As? Do bidder cumulative abnormal returns in cross-border M&As decrease as cultural distance between the acquiring and target country increases? Do acquisitions involving private target firms yield higher bidder returns compared to acquisitions involving public target firms? The hypotheses are tested using standard event study methodology and cross-sectional regression models. The dataset consists of 284 M&A announcements, including 109 domestic and 175 cross-border deals. Data was retrieved from LSEG and FinBas. The main finding is that cross-border deals yielded higher bidder returns compared to domestic transactions, contradicting with the study’s hypothesis. Contrary to the expectation that cultural distance reduces bidder CAR, the results suggest a positive relationship between cultural distance and bidder returns. No statistically significant evidence was found regarding the impact of the target firm’s public status on bidder CAR. The findings of this study contribute to closing a geographic research gap, as Sweden had been relatively unexplored in this area prior to this research.
Inflation and Asset Behavior: An Empirical Analysis of Bitcoin’s Hedging Potential Compared to Gold and Oil
(2025-06-25) Damberg, Victor; Vähäkari, Jacob; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This study examines whether bitcoin exhibits inflation hedging characteristics and can be utilized by investors to preserve their capital from erosion caused by inflation. Furthermore, comparison with traditional inflation hedging assets such as gold and oil is made to determine whether bitcoin outperforms these assets. To accomplish this, two different linear regression models were constructed, where the first model focuses on the period between 2014-2024 and the second model focuses on the period 2019-2022. Moreover, this thesis is limited to U.S inflationary data. By dividing the thesis in two linear regression models, bitcoin's relationship with inflation can be analyzed both in the long-term and during times of heightened volatility in inflation, particularly before, during and after the COVID-19 pandemic. The results of the first model found no statistically significant relationship between bitcoin and inflation. However, the second model found a strong statistically negative relationship. Therefore, bitcoin may not serve as an inflation hedging asset. In comparison, gold and oil have been found from previous empirical studies to at least exhibit partial inflation hedging characteristics, implying a more suitable choice for investors worried about inflation.
Green Investments - Better Business? A Study on the Effect of ESG on Stock Returns on the European Market
(2025-06-25) Sjöfors, Emma; Sjöholm, Jenny; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This study examines whether there is a causal relation between ESG scores and stock returns. To investigate this an OLS-regression has been made using data collected from companies all over Europe. The chosen years for the study is 2014-2018 to avoid potential biases due to the Covid-19 pandemic. To isolate the effect of ESG scores some control variables were added to the regression. In total five regressions were made starting with only ESG and return, and then gradually incorporating more variables. In all of the regressions ESG score were statistically significant implying there is a causal relation between ESG scores and stock returns. However, since the coefficient of ESG in most of the regressions were negative and had a value of almost zero, the impact in practice is almost non-existing. This could be explained by the signaling approach which refers to the fact that ESG works as a symbol rather than giving financial value. Another potential explanation to the result could be found within the efficient market hypothesis, which suggests all available information, including ESG data, should already be included in the market price. However, since it has been established that there is a causal relation between ESG and return it could indicate a relation to the semi-strong form of EHM.
The Role of Environmental Factors in Explaining Return Variation in Equity Markets
(2025-06-25) Nyman Sjöström, Alexander; Von der Lancken, Erik; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This study investigates whether environmental factors help explain return variation in equity markets, and if so, whether this relationship reflects a climate-related risk premium or investor preferences. We use the Refinitive ESG database (2025) to construct our own environmental score, which is then incorporated in a Green Minus Brown (GMB) factor. The time span for our study is 2015 to 2024. Our findings indicate that there is a varying time effect: prior to 2020, environmental performance had limited influence on returns, while after 2020, the GMB factor provided meaningful explanatory power for several portfolios. This suggests a growing market relevance for environmental characteristics in recent years. We also observed that green stocks tended to be most large-cap while brown firms were often small-cap. Our study contributes to the growing literature by showing that the explanatory power of environmental performance has grown over the years. However, our Fama–MacBeth regression results indicate that the GMB factor is not a priced risk factor in a cross-sectional sense. Further research is needed to assess whether these patterns hold across other markets and longer time periods.
The Impact of Interest Rates on Long-Term IPO Performance: An Empirical Study of the Swedish Market
(2025-06-25) Lunneryd, Nils; Wicksell, Tim; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This thesis examines how the interest rate, at the offering date, affects the long term performance of Initial Public Offering. We focus on IPOs in Sweden from 2008 to 2022, analyzing a dataset of 269 listings. Using both cumulative and time-weighted return approaches, we examine the link between monetary policy and returns over three years. The analysis points to a clear non-linear pattern: IPOs launched when interest rates were high tend to perform worse than those introduced during periods of lower rates. The non-linear and downward sloping pattern, suggests that timing in relation to interest rates matters more than often assumed. Our findings imply that investors may not fully take monetary conditions into account when pricing IPOs, which challenges the idea of fully efficient markets. These insights may be valuable to those investing in or planning IPOs, as well as to policymakers interested in how monetary policy affects new listings.
The Impact of Total Expense Ratio on Risk-Adjusted Returns in Swedish Actively Managed Equity Funds
(2025-06-25) Nielsen, Julius; Simonsson, Jacob; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This thesis examines the relationship between the fund’s total expense ratio (TER) and its risk-adjusted performance. 81 unique funds are included, all registered in Sweden, have their investment focus set to Sweden, are equity funds, and are actively managed. The measures used for risk-adjusted performance are Sharpe ratio, Treynor ratio and Jensen’s alpha, they’re all calculated based on the fund’s daily NAV-prices, adjusted for fees, between January 2020 to December 2024. Each fund’s yearly beta is calculated based on the benchmark index OMXS30 and the risk-free rate used in the models is the average yield of the 1-month Swedish Treasury Bill. The relationship between total expense ratio (TER) and risk-adjusted performance was examined using two regression models, Pooled OLS and Fixed effects. Using an F-test to compare the two models, the fixed effect model was shown to be the best fit for all three regressions. Based on the fixed effect regressions, the total expense ratio (TER) had a negative impact on the risk adjusted performance. In all three regressions, the variable is statistically significant at a 10% significance level. This shows that higher TER is expected to reduce the equity funds risk-adjusted performance.
Portfolio Efficiency of Swedish Bank Funds A quantitative study of fund portfolio efficiency among major Swedish Banks
(2025-06-25) Perman, Tobias; Persson, Daniel; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This thesis investigates whether efficient portfolios can be constructed using funds from a single bank and whether combining funds from multiple banks results in superior risk-adjusted performance. The study is grounded in Modern Portfolio Theory, using efficient frontier modeling and performance metrics such as the Sharpe ratio and Jensen’s alpha. The study analyzes a sample of 20 actively managed equity mutual funds, consisting of five funds from each of the four largest Swedish banks: Handelsbanken, SEB, Nordea, and Swedbank. Daily returns, standard deviations, and covariances for these funds were calculated to construct Efficient Frontiers and determine the tangency portfolio for each bank. The results show that optimized single-bank portfolios from Nordea and Swedbank achieved the highest Sharpe ratios, indicating better risk-adjusted returns than those from SEB and Handelsbanken. All sampled funds exhibited positive Jensen’s alpha, indicating outperformance relative to market benchmarks. Among the individual banks, Nordea’s portfolio delivered the highest risk-adjusted return. The findings also suggest that investors achieve more efficient portfolios by diversifying across banks.
Financial Market Response to SFDR: ESG Scores and Stock Performance in the EU Banking Sector
(2025-06-25) Christiansen, Malcolm; Tönnberg, Douglas; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This study investigates the financial market's response to the European Union's Sustainable Finance Disclosure Regulation (SFDR) and aims to examine EU banks' stock returns based on their ESG performance. Previous research indicates that increased regulation has led to mixed results depending on sector and framework, and that a high ESG is not always positively associated with higher returns. This study contributes by analysing a new regulatory framework within the specific context of the EU banking sector. Using panel data from 58 EU banks between 2010 and 2024, OLS regressions are applied to assess SFDR's effect on abnormal returns. The regression results varied regarding the effect of a high ESG during the study period. The thesis ultimately revealed a significant but modest negative relationship of -0.01 percentage points between high ESG scores and abnormal returns in the post-SFDR period. This finding aligns with stakeholder and principal-agent theories, suggesting that as sustainability disclosure becomes mandatory, the market may reassess the value of high ESG scores, perceiving less sustainable advantage for these banks. However, it remains important to note that macroeconomic events, which were not controlled for, could have influenced these results.
Driven by Emotion? A Study on Investor Sentiment and the US Stock Market
(2025-06-25) Kutlija, Lara; Taci, Selma; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This thesis examines the extent to which investor sentiment can predict stock market movements in the United States, with focus on the S&P 500 Index. Using a quantitative approach, the study analyzes data from 2006 to 2023 and applies both Ordinary Least Squares and GARCH regression models. Two sentiment indicators are central to the analysis: the CNN Fear and Greed Index, which captures overall market mood, and the American Association of Individual Investors Sentiment Survey, which reflects individual investor expectations. The purpose is to explore whether emotional factors, such as fear and greed, can help explain deviations from traditional financial theories like the Efficient Market Hypothesis and Modern Portfolio Theory. The empirical findings reveal a negative correlation between sentiment and future market volatility. While sentiment alone cannot fully predict market trends, the results indicate that emotionally driven investor behavior plays a significant role, particularly during periods of high uncertainty. These insights support the relevance of behavioral finance and suggest that incorporating sentiment into financial analysis may improve the understanding of market dynamics. The study concludes that sentiment indicators, especially when combined, can serve as valuable tools for identifying emotionally driven market movements and contribute to more informed investment strategies.
Explaining Abnormal Returns from Insider Purchases A study on insider purchases in large vs small cap firms
(2025-06-25) Berggren, Axel; Östman, Edvin; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This study examines insider trading with the purpose of investigating if insider purchases on publicly traded Swedish firms generate abnormal returns. The study also focuses on whether abnormal returns differ depending on specific firm- and market-variables. The analysis is based on insider purchases between 2022 and 2024, using event study methodology to calculate cumulative abnormal returns for the two groups: large and small cap firms. A 200-day estimation window and a 8-day event window are applied to capture the entire effect of the insider purchase. In addition, regression analysis is used to investigate if the variables; insider position, trade value, and market volatility, can explain the variation in abnormal returns. The results show that insider purchases are followed by statistically significant positive abnormal returns, with small cap firms generating significantly higher Cumulative Abnormal Returns (CAR). Regression findings indicate that insider position, trade value, and volatility significantly influence the size of abnormal return, also suggesting that insider purchases are a stronger signal in small cap firms with greater information asymmetry. The results contribute to the existing literature by using recent data to show that abnormal returns exist in the Swedish markets and are larger in small cap firms.
Assessing ESG and Board Diversity´s influence on financial performance: A study on the Scandinavian and Emerging Markets
(2025-06-25) Danielsson, Anton; Karjalainen, Linnea; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This study examines whether ESG and Board Diversity has a correlation with financial performance, in the form of return on equity. The analysis focuses on the Scandinavian and selected Emerging markets over the period 2013-2023, with the sample comprising firms listed in their respective countries' benchmark indices. Altogether, the Scandinavian market consists of 72 firms in Sweden, Norway and Denmark, whereas the Emerging market consists of 155 firms in Brazil, India and South Africa. The regression results from the final model featured differences between the Scandinavian and the Emerging markets. In the Scandinavian market, increased Environmental and Social scores were found to have a negative correlation with return on equity, while the effect of Board Diversity on financial performance increased with higher Social scores and decreased with higher Governance scores. In contrast, the Emerging markets unveiled that higher social scores corresponded with higher return on equity while increased Environmental score corresponded with lower return on equity. Hence, these results align with earlier research suggesting that the effect of ESG and women in Boards is rather ambiguous and depends on regional differences.
Examining the Impact of Stock Buybacks on Operating Performance: A Study on Publicly Listed Banks Empirical evidence in North America and Europe between 2010-2022
(2025-06-25) Aref, Daro; Eriksson, Filip; University of Gothenburg/Department of Economics; Göteborgs universitet/Institutionen för nationalekonomi med statistik; University of Gothenburg/Department of Business Administration; Göteborgs universitet/Företagsekonomiska institutionen
This thesis investigates the relationship between share repurchases and operating performance among publicly listed banks in North America and Europe during the period 2010–2022. The analysis examines whether buybacks contribute to improved financial performance, measured by return on assets (ROA) and return on equity (ROE), and whether this relationship was affected during the Covid-19 pandemic. By using panel data from 2010 to 2022 and applying fixed effects regression models, the study incorporates a sample of 37 large banks, segmented by region and adjusted for crisis-specific effects through interaction terms. The results indicate that repurchases are generally associated with improved performance, particularly in terms of ROE and that this effect is stronger among North American banks. These findings appear more consistent with the Free Cash Flow Hypothesis, suggesting that repurchases are used to manage excess capital and improve efficiency. However, the performance-enhancing effect of buybacks weakened significantly during the Covid-19 period. The study contributes to existing literature by extending the analysis beyond prior timeframes and highlighting the conditional effectiveness of share repurchases in the banking sector while also examining impact of the COVID19- shock. The results offer implications for financial managers and policymakers evaluating capital distribution strategies under varying macroeconomic environments.

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