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CEO Education and Corporate Environmental Footprint

45 Pages Posted: 23 Oct 2017  

Mario Daniele Amore

Bocconi University

Morten Bennedsen

INSEAD - Economics and Political Sciences

Birthe Larsen

Copenhagen Business School - Department of Economics

Philip Rosenbaum

Copenhagen Business School - Department of Economics

Date Written: October 23, 2017

Abstract

We analyze the effect of CEO education on environmental decision-making. Using a unique sample of Danish firms from 1996 to 2012, we find that CEO education significantly improves firms’ energy efficiency. We derive causality using health shocks: the hospitalization of highly educated CEOs induces a drop in energy efficiency, whereas the hospitalization of less educated CEOs does not have any significant effect. Exploring the mechanisms at play, we show that our results are driven by the length of education rather than the field of education. CEO education improves corporate energy efficiency through personal environmental awareness: highly educated CEOs exhibit greater concerns for climate change, as measured by a survey of social preferences, and own more environmentally-efficient cars. Taken together, our findings suggest that education shapes managerial styles giving rise to environmental sustainability.

Keywords: CEOs; Education; Climate Change; Energy Efficiency

JEL Classification: G34, I20, J24, Q50

Suggested Citation

Amore, Mario Daniele and Bennedsen, Morten and Larsen, Birthe and Rosenbaum, Philip, CEO Education and Corporate Environmental Footprint (October 23, 2017). Available at SSRN: https://ssrn.com/abstract=3057261

Mario 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

Birthe Larsen

Copenhagen Business School - Department of Economics ( email )

Porcelænshaven 16 A
Copenhagen F, DK-2000
Denmark
(+45) 61 79 45 25 (Phone)

Philip Rosenbaum

Copenhagen Business School - Department of Economics ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

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