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Leviathan Inc. and Corporate Environmental Engagement

62 Pages Posted: 1 May 2017 Last revised: 12 Sep 2017

Po-Hsuan Hsu

University of Hong Kong

Hao Liang

Singapore Management University, Lee Kong Chian School of Business; Tilburg University, CentER

Pedro P. Matos

University of Virginia - Darden School of Business; European Corporate Governance Institute (ECGI)

Date Written: September 4, 2017

Abstract

In a 2010 special report, The Economist called the resurgence of state-owned mega-enterprises, especially those in emerging economies, “Leviathan Inc,” and criticized their poor governance and low efficiency. We show that state-owned enterprises engage more in environmental issues and are more responsive to salient environmental events. The effect is more pronounced in energy firms located in emerging economies and countries with higher energy risks, and with direct ownership held by domestic government rather than sovereign wealth funds. Market value does not suffer from such engagement. These results suggest that “Leviathan Inc.” may be better positioned at dealing with environmental externalities.

Keywords: state ownership, environmental engagement, sustainability, ownership structure

JEL Classification: G32, H11, H41, Q56

Suggested Citation

Hsu, Po-Hsuan and Liang, Hao and Matos, Pedro P., Leviathan Inc. and Corporate Environmental Engagement (September 4, 2017). Darden Business School Working Paper No. 2960832; ECGI - Finance Working Paper No. 526/2017. Available at SSRN: https://ssrn.com/abstract=2960832 or http://dx.doi.org/10.2139/ssrn.2960832

Po-Hsuan Hsu

University of Hong Kong ( email )

Pokfulam Road
Hong Kong
China

Hao Liang (Contact Author)

Singapore Management University, Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

HOME PAGE: http://business.smu.edu.sg/faculty/profile/130396/LIANG-Hao

Tilburg University, CentER ( email )

Netherlands

Pedro P. Matos

University of Virginia - Darden School of Business ( email )

University of Virginia
P.O. Box 6550
Charlottesville, VA 22906-6550
United States

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

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