CEO Education and Corporate Environmental Footprint
Posted: 23 Oct 2017 Last revised: 6 Feb 2019
Date Written: February 5, 2019
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 seek to 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 largely driven by advanced education in business degrees. Moreover, we show that CEO education is associated with greater environmental awareness: highly educated CEOs exhibit greater concerns for climate change, as measured by a survey of social preferences, and drive more environmentally efficient cars. Taken together, our findings suggest that education shapes managerial styles giving rise to greater sustainability in corporate actions.
Keywords: CEOs; Education; Climate Change; Energy Efficiency
JEL Classification: G34, I20, J24, Q50
Suggested Citation: Suggested Citation
Mario Daniele Amore (Contact Author)
Bocconi University - Department of Management and Technology ( email )
Via Roentgen 1
Milan, MI 20136
Italy
European Corporate Governance Institute (ECGI) ( email )
c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium
Morten Bennedsen
INSEAD - Economics and Political Sciences ( email )
Boulevard de Constance
F-77305 Fontainebleau Cedex
France