We study how green disclosure shapes portfolios and green investment. Disclosure polarizes shareholders and greenness outcomes: green investors concentrate in green firms and push them to become greener, while brown firms are held by less-green investors and reduce greenness. Because brown firms typically have cheaper opportunities to increase greenness, this sorting reduces aggregate greenness and imposes an externality cost despite improving allocative efficiency. Disclosure alone...

We document market power in U.S. equity securities lending and examine its origins and consequences. We develop a dynamic model of securities lending and estimate it on the cross-section of U.S. equities, showing that the dominant custodian-intermediated market structure emerges as a response to short sellers' information-leakage concerns. Short sellers prefer this opaque market structure over a centralized alternative, particularly for smaller stocks, despite the...