Corporate governance and green innovation

We study the relationship between corporate governance and firms׳ environmental innovation. Exploiting changes in antitakeover legislation in the US, we show that worse governed firms generate fewer green patents relative to all their innovations. This negative effect is greater for firms with a sma...

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Bibliographic Details
Published inJournal of environmental economics and management Vol. 75; pp. 54 - 72
Main Authors Amore, Mario Daniele, Bennedsen, Morten
Format Journal Article
LanguageEnglish
Published New York Elsevier Inc 01.01.2016
Elsevier Science Publishing Company, Inc
Subjects
Anti takeover strategy
Corporate governance
Economics
Environment
Environment management
Environmental management
Green innovation
Innovation
Innovations
Legislation
Ownership
Pollution abatement
Pollution control
Raw materials
Studies
United States
United States > US
Q55
Patents
Corporate governance
G34
Environment
O31
Q20
Green innovation
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Summary:We study the relationship between corporate governance and firms׳ environmental innovation. Exploiting changes in antitakeover legislation in the US, we show that worse governed firms generate fewer green patents relative to all their innovations. This negative effect is greater for firms with a smaller share of institutional ownership, with a smaller stock of green patents, and with more binding financial constraints. Investigating regulatory and industry variations, we also find more pronounced effects for firms operating in states with lower pollution abatement costs, and in sectors less dependent on energy inputs. Overall, our results suggest that ineffective corporate governance may constitute a major obstacle to environmental efficiency.
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ISSN:0095-0696
1096-0449
DOI:10.1016/j.jeem.2015.11.003