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Corporate Governance and Green Innovation

Mario Daniele Amore

Bocconi University

Morten Bennedsen

INSEAD - Economics and Political Sciences

April 21, 2015

INSEAD Working Paper No. 2014/35/EPS

We present evidence of corporate governance effects on 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 a shift in corporate governance toward more managerial entrenchment will weaken the incentives and resources necessary to devise and sustain green innovation strategies.

Number of Pages in PDF File: 49

Keywords: corporate governance, environment, green innovation, patents

JEL Classification: G34, O31, Q20

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Date posted: February 13, 2013 ; Last revised: April 21, 2015

Suggested Citation

Amore, Mario Daniele and Bennedsen, Morten, Corporate Governance and Green Innovation (April 21, 2015). INSEAD Working Paper No. 2014/35/EPS. Available at SSRN: http://ssrn.com/abstract=2215753 or http://dx.doi.org/10.2139/ssrn.2215753

Contact Information

Mario Daniele Amore (Contact Author)
Bocconi University ( email )
Via Sarfatti, 25
Milan, MI 20136
Morten Bennedsen
INSEAD - Economics and Political Sciences ( email )
Boulevard de Constance
F-77305 Fontainebleau Cedex


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