Professor of Economics
CEOs; Education; Climate Change; Energy Efficiency;
The authors analyze the effect of CEO education on environmental decision-making. Using a unique sample of Danish firms from 1996 to 2012, the authors find that CEO education significantly improves firms’ energy efficiency.
The authors 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, the authors show that their results are largely driven by advanced education in business degrees.Moreover, the authors 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.