Board Characteristics, External Governance and the Use of Renewable Energy: International Evidence From Public Firms

55 Pages Posted: 20 Jul 2020

See all articles by Dayong Zhang

Dayong Zhang

Southwestern University of Finance and Economics (SWUFE) - Research Institute of Economics & Management

Zhiwei Zhang

Southwestern University of Finance and Economics (SWUFE) - Research Institute of Economics & Management

Qiang Ji

Chinese Academy of Sciences (CAS) - Institute of Policy and Management

Brian M. Lucey

Trinity Business School, Trinity College Dublin; Ho Chi Minh City University of Economics and Finance; Jiangxi University of Finance and Economics

Jia Liu

University of Salford

Date Written: June 26, 2020

Abstract

Adoption of renewable energy is one of the most important steps taken to cope with global warming and achieve sustainability. While its supply has seen a global boom, the adoption of renewable energy from the critical demand side faces clear challenges. This paper investigates firms’ use of renewable energy, paying special attention to factors in internal corporate governance and external governance. Based on 1,027 listed companies in 47 countries or regions, we show statistically significant evidence that both internal and external governance matter for firms’ adoption of renewable energy. We also find significant interactions between internal and external factors. Specifically, board duality and higher executive share reduce renewable energy adoption, strong external governance increases renewable energy adoption, and firms in common law systems tend to use fewer renewables. Our results are robust to different specifications, which allows us to tell an international demand-side story to complement the narrative on supply.

Keywords: Board characteristics; Corporate governance; External governance; Legal origin; Renewable energy

JEL Classification: G3, K2, Q2

Suggested Citation

Zhang, Dayong and Zhang, Zhiwei and Ji, Qiang and Lucey, Brian M. and liu, jia, Board Characteristics, External Governance and the Use of Renewable Energy: International Evidence From Public Firms (June 26, 2020). Available at SSRN: https://ssrn.com/abstract=3636181 or http://dx.doi.org/10.2139/ssrn.3636181

Dayong Zhang

Southwestern University of Finance and Economics (SWUFE) - Research Institute of Economics & Management ( email )

55 Guanghuacun Street
Chengdu, Sichuan 610074
China

Zhiwei Zhang

Southwestern University of Finance and Economics (SWUFE) - Research Institute of Economics & Management ( email )

55 Guanghuacun Street
Chengdu, Sichuan 610074
China

Qiang Ji

Chinese Academy of Sciences (CAS) - Institute of Policy and Management ( email )

No.15 ZhongGuanCun BeiYiTiao Alley
Haidian District
Beijing, 100190
China

Brian M. Lucey (Contact Author)

Trinity Business School, Trinity College Dublin ( email )

The Sutherland Centre, Level 6, Arts Building
Dublin 2
Ireland
+353 1 608 1552 (Phone)
+353 1 679 9503 (Fax)

Ho Chi Minh City University of Economics and Finance ( email )

59C Nguyen Dình Chieu
6th Ward, District 3
Ho Chi Minh City, Ho Chi Minh 70000
Vietnam

Jiangxi University of Finance and Economics ( email )

South Lushan Road
Nanchang, Jiangxi 330013
China

Jia Liu

University of Salford ( email )

University of Salford
M5 4WT Salford, Lancashire M5 4WT
United Kingdom

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