Professor of Economics
Corporate Governance; Environment; Green Innovation; Patents; G34; O31; Q20; Q55; Corporate Governance; Value Creation, Strategy and Implementation ;
The authors study the relationship between corporate governance and firms' environmental innovation. Exploiting changes in antitakeover legislation in the US, they show that worse governed firms generate fewer green patents relative to all their innovations.This negative effect is greater for firms with a smaller share of institutional ownership, with a smaller stock of green patents, and with more binding financial constraints.Investigating regulatory and industry variations, the authors also find more pronounced effects for firms operating in states with lower pollution abatement costs, and in sectors less dependent on energy inputs. Overall, their results suggest that ineffective corporate governance may constitute a major obstacle to environmental efficiency.