Corporate Governance and Green Innovation

52 Pages Posted: 13 Feb 2013 Last revised: 11 Nov 2015

Mario Daniele Amore

Bocconi University

Morten Bennedsen

INSEAD - Economics and Political Sciences

Date Written: November 11, 2015

Abstract

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.

Keywords: corporate governance, environment, green innovation, patents

JEL Classification: G34, O31, Q20, Q55

Suggested Citation

Amore, Mario Daniele and Bennedsen, Morten, Corporate Governance and Green Innovation (November 11, 2015). Journal of Environmental Economics and Management, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2215753 or http://dx.doi.org/10.2139/ssrn.2215753

Mario Daniele Amore (Contact Author)

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

Morten Bennedsen

INSEAD - Economics and Political Sciences ( email )

Boulevard de Constance
F-77305 Fontainebleau Cedex
France

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