Corporate Governance and Pollution Externalities of Public and Private Firms

89 Pages Posted: 14 Mar 2019

See all articles by Sophie Shive

Sophie Shive

University of Notre Dame - Department of Finance

Margaret Forster

University of Notre Dame

Date Written: February 21, 2019

Abstract

The number of U.S. publicly traded firms has halved in 20 years. How will this shift in ownership structure affect the economy's externalities? Using comprehensive data on greenhouse gas emissions from 2007-2016, we find that independent private firms are less likely to pollute and incur EPA penalties than are public firms, and we find no differences between private sponsor-backed firms and public firms, controlling for industry, time, location and a host of firm characteristics. Within public firms, we find a negative association between emissions and mutual fund ownership and board size, suggesting that increased oversight may decrease externalities.

Keywords: carbon emissions, climate change, private firms, corporate governance, mutual fund ownership, board size

JEL Classification: G39

Suggested Citation

Shive, Sophie and Forster, Margaret, Corporate Governance and Pollution Externalities of Public and Private Firms (February 21, 2019). Available at SSRN: https://ssrn.com/abstract=3339517 or http://dx.doi.org/10.2139/ssrn.3339517

Sophie Shive (Contact Author)

University of Notre Dame - Department of Finance ( email )

P.O. Box 399
Notre Dame, IN 46556-0399
United States

Margaret Forster

University of Notre Dame ( email )

361 Mendoza College of Business
Notre Dame, IN 46556-5646
United States

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