What Impact Does Corporate Governance Have on Corporate Environmental Performances? An Empirical Study of Italian Listed Firms

Franco Rubino and Francesco Napoli
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Franco Rubino: Department of Business and Law, Università della Calabria, 87036 Arcavacata di Rende (CS), Italy
Francesco Napoli: Faculty of Economics, Università degli Studi e-Campus, 22060 Novedrate (CO), Italy

Sustainability, 2020, vol. 12, issue 14, 1-21

Abstract: In this paper, we first build a multi-theoretical framework through which we hypothesise that the governance mechanisms of a board of directors, on the one hand, and the ownership structures of family and nonfamily firms, on the other, can have an impact on corporate environmental performances. We then test this hypothesis against a sample of 83 Italian listed firms, noting the characteristics of their governance and ownership structures over the five years from 2013 to 2017. We also take note of data from the firms’ Sustainability Reports on emissions of greenhouse gases over the 2014–2018 five-year period. The results we obtain support the prediction, made in line with the Agency-Theory perspective, that there is a positive relationship between board independence and the adoption of environmentally responsible practices. Only partial support emerges for the hypotheses, made in line with the Resource Dependence Theory, according to which better corporate environmental performances can be obtained by increasing the resource provision of board members. In particular, we discover a positive effect of a large-size board on corporate environmental performances, but no significant effect arising from the presence of interlocked board members. Finally, our study provides support for the theoretically-based hypothesis according to which the non-economic utility (socioemotional wealth) of family ownership makes family firms likely to have better environmental performances than non-family firms.

Keywords: corporate governance; environmental impacts; family firms; empirical study (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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