We examine the value of skilled foreign labor in finance by leveraging on two natural experiments. We find that hedge funds that secure more H-1B visas in random lotteries deliver higher alphas, Sharpe ratios, and information ratios. Moreover, an unexpected reduction in the H-1B quota undermined the performance of hedge funds that were dependent on H-1B workers. The superior performance of funds with high H-1B allocations can be attributed to highly-educated STEM majors operating systematic strategies. Notwithstanding the valuable skills that foreign workers possess, racial and ethnic homophily induces some fund managers to eschew foreign labor.

We propose a precise definition of greenwashing in asset management that combines ESG self-labels, sustainability scores of portfolio holdings, and funds’ voting behavior. Armed with this definition, we are able to quantify the prevalence of greenwashing in the US mutual fund industry. Although self-labeled ESG funds dominate non-ESG funds in terms of ESG ratings and voting support for ESG proposals, 24% of them are greenwashers according to our definition. Greenwashers are more likely to belong to larger and older fund families and less likely to be offered by signatories of the United Nations Principles for Responsible Investment. Importantly, while retail investors do not distinguish between greenwashers and true ESG funds, institutional investors are not deceived by the former. Our results suggest that accusations of ubiquitous greenwashing in asset management exaggerate the true extent of the problem. However, there is room for regulation aimed at enhanced ESG disclosure, at least for those funds that target retail investors.

I study the causal effect of bond investor demand on the financing and investment decisions of nonfinancial firms using granular data on the bond transactions of U.S. insurance companies. Liquidity inflows from insurance premiums combined with insurers' persistent investment preferences identify bond demand shifts, which raise bond prices and reduce firms' financing costs. In response, firms issue more bonds, especially when they have well-connected bond underwriters. The proceeds are used for investment rather than shareholder payouts, particularly by financially constrained firms. The results emphasize that bond investors significantly affect corporate financing and investment decisions through their price impact.