Corporate Governance and Green Innovation

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

See all articles by Mario Daniele Amore

Mario Daniele Amore

HEC Paris - Strategy & Business Policy; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Morten Bennedsen

INSEAD - Economics and Political Sciences; University of Copenhagen - Department of Economics

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)

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Morten Bennedsen

INSEAD - Economics and Political Sciences ( email )

Boulevard de Constance
F-77305 Fontainebleau Cedex
France

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5, Bygn 26
Copenhagen, 1353
Denmark

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